Asia Tech Wire (Oct 24) -- ByteDance, the Chinese parent company of TikTok, has seen both revenue growth and profitability decline in 2024, according to Chinese media outlet 36Kr.

After years of rapid growth, ByteDance is encountering serious challenges.

Thursday's report, citing people close to ByteDance with knowledge of the matter, said the company's revenue growth rate declined more sharply in the first three quarters of 2024.

In addition, its profit margins are back on a downward trajectory after a brief boost from the "fat removal" and "thin addition" of its organizational structure over the past two years.

Citing data, the report said ByteDance's domestic advertising revenue engine decelerated, especially Douyin e-commerce and service business growth slowed down, resulting in the advertising revenue growth rate fell to less than 17% from 40% at the beginning of the year.

Meanwhile, the impact of geopolitics on TikTok revenue began to show, And the GMV for TikTok's e-commerce business failed to meet expectations for several consecutive months, and the replication of live e-commerce models in Europe and the U.S. encountered obstacles.

Moreover, the high investment in the Doubao large language models (LLMs) and related business is also an important reason for ByteDance's declining profitability, as the field is in a stage of fierce competition and huge investment, and companies like OpenAI are also facing huge losses.

To deal with the challenges, ByteDance continues to engage in the "fat removal" and "thin addition", shrinking non-core businesses while firmly investing in emerging areas such as large models.