Introduction
TikTok, the popular video-sharing platform, has reported a significant economic impact in Mexico, estimated at 45,240 million pesos for the year 2024. This analysis, prepared by The CIU at TikTok’s request, breaks down the platform’s contribution into three categories: direct economic impact, indirect economic impact, and induced consumption effects.
Direct Economic Impact
TikTok’s direct economic impact in Mexico, encompassing the company’s revenues, salary payments, investments, taxes, and purchases from third parties, amounts to 6,347 million pesos or 14% of the total impact.
Indirect Economic Impact
The indirect economic impact, which includes sales of goods and services by micro, small, and medium-sized enterprises (MSEs) that use TikTok, reaches 30,825 million pesos or 68% of the total. This is the largest portion of TikTok’s impact on Mexico’s economy.
Induced Consumption Effects
The induced consumption effects, representing the spending by TikTok employees and MSEs using the platform, amount to 8,068 million pesos or 18% of the total.
Employment Impact
The report also estimates 58,614 jobs linked to TikTok’s use and presence in Mexico during 2024. Of this total, 41,323 jobs are direct and indirect, including hires in companies, suppliers, and units that expanded their activities. The remaining 17,291 jobs are induced by salary expenditure generated, primarily concentrated in small and medium-sized enterprises.
Professional Services Most Affected
Professional services, such as those offered by specialists in specific areas like lawyers, doctors, engineers, or accountants, are most affected by TikTok’s operations in Mexico, with an economic impact of 7,274 million pesos.
- Food and Beverages: 3,546 million pesos
- Health and Beauty: 3,230 million pesos
- Tourism and Transportation: 2,881 million pesos
- Handicrafts and Handmade Products: 2,867 million pesos
The majority of the economic impact comes from MSEs that rely on TikTok to reach new customers.
Changes in Consumption
The impact is not only evident in sales and employment figures. The survey included in the study reveals how TikTok influences users’ purchasing decisions. Fifty-eight percent of respondents reported visiting an establishment after seeing recommendations on the platform, and 56% found in-app advertising helpful in deciding what to buy.
TikTok’s cultural and consumption influence is part of its economic impact. When a user sees a product on TikTok and goes to buy it, it generates activity in local restaurants, stores, and services.
Additionally, 63% of surveyed users reported acquiring new skills or knowledge through videos in the app, reflecting an additional benefit in terms of human capital.
TikTok in Mexico vs. TikTok in the US
This announcement comes as TikTok faces discussions on regulation, privacy, and its influence on public life. The US government is in talks with the Chinese government to ensure TikTok’s operations in North America are managed by US investors.
Despite these discussions, TikTok’s narrative in Mexico emphasizes its economic and social value.
According to Édgar Rodríguez, Director of Public Policy for TikTok in Latin America, the Mexican market is crucial corporately because many regional decisions are made from TikTok’s Mexico City office, along with the market’s size and community trust.
“The Mexican market is significant, as reflected in having one of TikTok’s primary corporate offices located there,” said Rodríguez.
With a total of 45,240 million pesos attributed to TikTok’s activities in 2024, The CIU’s study positions the app as a relevant economic actor in Mexico. Most of this figure represents the boost to MSEs, along with employment, taxes, and additional consumption.
