By Julie Zhu and Yingzhi Yang

HONG KONG/BEIJING (Reuters) - TikTok-owner ByteDance is on track to generate at least 180 billion yuan ($27.2 billion) in advertising revenue in China this year, which will cement its no. 2 spot in China's digital ad market, two people with knowledge of the matter said.

The company's overall revenue goal for 2020 is around $30 billion, Reuters previously reported, so the latest figures mean it is performing in line with its plan.

While TikTok is what ByteDance is best known for globally, the app contributes little to the Chinese company's revenue overall. It relies on Douyin, the Chinese version of TikTok, for nearly 60% of ad revenue, followed by news aggregator Jinri Toutiao for 20% and long-form video platform Xigua for under 3%, according to one of the sources.

ByteDance declined to comment.

The group is one of only a few Chinese companies with global reach, but it is currently battling plans to force it to divest TikTok's U.S. operations because of Washington's national security concerns over the data of more than 100 million U.S. users.

STRENGTH AT HOME

ByteDance overtook Baidu <BIDU.O> to become China's second largest digital ad player in the first half of 2019 with 23% ($7.6 billion) of the total digital ad spend in the country, according to consultancy R3, with Alibaba Group <9988.HK> in first place, raking in $10.9 billion or 33%.

The gap between ByteDance and Alibaba has narrowed this year, according to the second source. Although ByteDance did not disclose ad revenue for 2019, Reuters has reported it generated total revenue of $16 billion last year.

As ByteDance pursues its global ambitions, it is also looking to step up investment in three main areas at home next year - e-commerce, search and longer-form videos, the source said.

It plans to invest around 10 billion yuan, including the value of traffic and advertising support to partners, on Xigua next year, its longer form video app, with the aim of increasing the number of daily active users to over 100 million, the first source said.

Douyin's e-commerce platform, one of the fastest-growing sectors within the company, is projected to hit around 150 billion yuan in gross merchandise value (GMV) this year, according to both sources, who declined to be named as the information had not been made public.

The final numbers will be adjusted at the end of the year to take account of key campaigns around events such as year-end sales, which haven't been officially launched yet, the people said. Douyin held its first major shopping festival on Wednesday, in tandem with Alibaba's mega shopping event Singles' Day.