Since launching globally four years ago, TikTok's user growth has been insane. It started 2018 with about 55 million monthly users, and now it has over 1 billion. Growth has barely slowed over the last 14 months, with the short-form video app adding over 300 million new users in that time.

Meanwhile, the digital ad duopoly of Facebook (META 2.23%) and Alphabet's (GOOG 2.21%) (GOOGL 2.26%) Google has taken steps to combat the rise of TikTok, which poses a threat to engagement on their platforms. The young video-sharing platform's rapid growth may be the biggest threat either company has seen in the social media space.

A group of teens all staring at their smartphones.

Image source: Getty Images.

Not another Snapchat

This is far from the first time a younger social media company has threatened the dominance of Facebook or Google. Snap's (SNAP 2.64%) Snapchat was seen as a Facebook killer in the mid-2000s. The start-up was growing quickly in 2013 when it had 25 million daily active users, and Facebook and Google both reportedly made acquisition offers

Snapchat grew quickly, reaching 153 million daily users three years later, but then Facebook rolled out Instagram Stories. That slowed Snapchat's growth considerably, and it floundered its way toward 186 million daily users by the end of 2018.

Snapchat has pivoted to focus more on its Discover section, and it's since started growing its user base again. It had 293 million users as of the end of the second quarter.

Facebook launched Instagram Reels, its TikTok clone, in August last year, but the effect on TikTok's growth has been far less noticeable than the effect of Stories on Snapchat. That's despite the fact that Snapchat and YouTube have launched TikTok-like products as well. Indeed, TikTok's user base has grown approximately 43% since its competitors started launching copycats.

The fact that TikTok's user growth isn't slowing down indicates that it's not just the format that makes the app so intriguing, but its ability to serve up the right content to its users at the right time. It's the algorithm. And the proprietary algorithm is much more difficult for another company to copy than just using the same video and social messaging formats.

What's more, the growing network of users also provides TikTok with a growing user-generated content advantage. That network effect continues to fuel its growth as it gives it more and better content to serve its audience.

What TokTok's rise means for Facebook and Google

The continued growth of TikTok despite the advertising duopoly's best efforts could soon become a meaningful threat to their businesses. The average TikTok user in America spends more time in the app than on either Facebook, Instagram, or YouTube.

And TikTok is just getting started with monetization. It rolled out new creative, collaboration, and measurement tools for advertisers in September, and it's focused heavily on social commerce. There's a big opportunity for social commerce to play a bigger role in advertising going forward, and it's one Facebook needs to execute on after recent changes to iOS privacy settings. Google has seen social commerce as a way for it to move deeper into e-commerce advertising as well.

If TikTok drives social commerce sales better than Facebook or Google, it has a big opportunity to steal away lucrative e-commerce advertising spend from the two giants. And TikTok already has a huge advantage, since it's based in China where social commerce is much more popular. In fact, it's been offering virtual storefronts on its Chinese app, Douyin, for years. It accounted for an estimated $77 billion in sales last year, tripling from 2019.

There are a lot of factors aligning in favor of TikTok, and it appears to be a much bigger threat to Facebook and Google than previous competitors.