China Leads the World in Mobile Video & Social Commerce
China is really exciting not just for Douyin but for all the social commerce happening there, apps like Mogu. China’s IPO movement and equity golden age has started as Kuaishou has decided on a Hong Kong IPO. Many western readers might not even know about Kuaishou.
Kuaishou is a Chinese video-sharing mobile app developed by Beijing Kuaishou Technology Co., Ltd, with a particularly strong user base among users outside of China’s Tier 1 cities. What does it matter? It’s Tencent backed, and the challenger to Douyin (TikTok in China) by ByteDance.
Valued at over US$30 billion, the company is targeting a listing in early 2021. Previously in 2019 it was considering a NYSE IPO, but things have changed. China is Kuaishou’s main market, and the app doesn’t have a presence in the U.S.
Kuaishou was most recently valued at $28 billion but today it’s likely worth around $36 billion. It is China’s original short-video king, and it now hosts ‘little shops’ and live streaming. China has undergone a “social commerce” revolution since the arrival of Covid-19 and it’s meant that China is 10 years ahead of the U.S. in live-streaming and its connection to E-commerce. In fact Chinese shoppers have been more mobile native for years so this is just a natural development.
Local media has reported that Kuaishou has hired Morgan Stanley, China Renaissance and Bank of America as bankers for the deal. Founded in 2011, Beijing-based Kuaishou was first created as a GIF generator app under the name GIF Kuaishou, which means “GIF Quick Hand” in Chinese.
It wasn’t until November 2012 that Kuaishou pivoted from being a utility into a short-form video social platform, which targeted users in lower-tier cities. It’s been a very smart strategy.
From then on, the Beijing-based platform became known simply as Kuaishou, or Kwai outside China. If you thought TikTok was goofy, Kuaishou has some pretty weird content that goes viral for sometimes the wrong reasons.
The nine-year-old company, backed by social media and gaming leader Tencent Holdings Ltd, is targeting a valuation of over $50 billion, according to Reuters. I think that’s a pretty crazy valuation since that would put it as valuable as Douyin, which it is not.
Douyin is around twice as big as well. In China, Douyin has ousted Kuaishou as the No. 1 short-video app even though Kuaishou is four years older. Kuaishou surpassed 300 million daily active users in February. In August, Douyin reached 600 million daily active users. This makes these mobile video centric channels pretty awesome in their scale.
Apps like Douyin and Kuaishou are China’s answer to YouTube. While YouTube is all about the Ads, Kuaishou is evolving more tied to E-commerce sales and that can boost China’s E-commerce trio outside of China.
“We see a high conversion rate of Kuaishou users who turn to live-streaming e-commerce on our platform,” said Yu Shuang, vice-president of e-commerce business at Kuaishou, in an email interview by the Post in July.
Meaning “fast hand” in Chinese, Kuaishou’s apps feature miscellaneous user-uploaded videos as well as live-streaming programs through which vendors can promote consumer products. China’s mini-apps, super-apps and now E-commerce streaming apps means its just way more advanced on mobile to connect consumers with products and services.
This was all very obvious years ago with how WeChat evolved, but now younger companies are adding to the layers of Chinese native video convenience in a market-of-everything tied to the attention economy, and not just Ads as is the case with the American internet.
While it doesn’t have the financial backing or virality of ByteDance apps, it’s impressive to see China able to fuel such rapid innovation. Kuaishou established its popularity among users in the country’s smaller cities and rural areas, with people streaming slices of everyday life from harvesting corn to slurping noodles.
It later expanded to include audiences in bigger cities, and content ranging from people playing video games to teenagers lip-syncing songs.
China is just so superior in social commerce and mobile innovation, it’s scary. The future of social media is actionable, and not just about attention, advertising and getting people addicted to apps as the models of Facebook and YouTube have tried to do.
Shopping matters, convenience matters, and China is bringing new things to the table. While Instagram is all about the image and the glamour, Kuaishou is about real people and real products. It’s a stark contrast between American and Chinese culture.