Golden Nine and Silver Ten are the best seasons in North China, and the capital market in this autumn is destined to be extremely busy.
Recently, when everyone was paying attention to the A+H listing plan of Ant Group, the parent company of the Big Mac and China’s largest mobile payment platform Alipay, news came out that the short video APP Kuaishou was seeking a listing on the Hong Kong Stock Exchange.
On September 17, according to Bloomberg, Kuaishou sought a listing on the Hong Kong Stock Exchange with a valuation of approximately US$50 billion. In this regard, Kuaishou officials said they would not comment.
On Kuaishou’s official website, self-introduction is as follows: “Quaishou, a national short video community, a platform for recording and sharing life. Here, you can see the real and interesting world, find people you are interested in, and let the world discover real and interesting things. Myself. Quickly, record the world and record you.”
The predecessor of Kuaishou, called “GIF Kuaishou”, was born in March 2011. It was originally a mobile application for making and sharing GIF pictures. In November 2012, Kuaishou transformed from a pure tool application to a short video community, a platform for users to record and share production and life.
Since then, Kuaishou has caught up with the dividend period of the development of mobile Internet. According to the public statistics of the company, Kuaishou has experienced nine rounds of financing. The most recent one was in December last year with a financing amount of nearly US$3 billion. Temasek, Boyu Capital, Tencent Investment and Red Shirt Capital completed publicly. According to media reports at the time, the valuation of this round of investment Kuaishou was approximately 28 billion U.S. dollars.
The “2019 Kuaishou Content Report” released by Kuaishou in February showed that Kuaishou Daily Life exceeded 300 million in early 2020. In January 2020, the “2019 Magnetic Engine Annual Report” released by Kuaishou showed that its full-year revenue target for 2019 was over fulfilled.
An obvious fact is that Tencent has participated in the development of Kuaishou since its D round of financing in 2017, and has supported Kuaishou’s growth all the way to the present, because Kuaishou and Tencent have another very strong opponent on the short video track—— Douyin.
And Douyin recently announced that as of August 2020, including the Douyin Volcano version, Douyin has more than 600 million daily active users. This number is double the 300 million that Kuaishou publicly announced before.
01 Catch up with short videos
According to statistics, the short video industry has sprouted since 2011. After years of development, 2019 will usher in explosive growth. The proportion of user time spent has rapidly increased from 9.9% in 2018Q3 to 23.8% in 2020Q2.
In this process, Kuaishou also continued to grow and grow. In 2013, Miaopai and Weishi went online one after another, which kicked off the formal development of short videos. But limited by the network conditions at the time, it failed to grow. Later, APPs such as Xiaokaxiu and Xiaoying appeared once hot, and then into 2015, a series of short video APPs such as Douyin, Volcano, and good-looking video have sprung up, and a large amount of capital has begun to intervene, and since 2017, the entire industry has been promoted. The fast lane of development.
On June 5, 2018, Kuaishou wholly acquired Acfun and gave strong support to Station A in terms of capital, resources, technology, etc. Station A maintained its independent brand and original team, and maintained independent operations. A station two-dimensional users and Z generation users have a strong appeal and a high degree of recognition.
According to data from QuestMobil, in a survey of users born in the 1990s, Kuaishou’s popularity ranks second after Douyin short videos.
In addition, TrustData announced the “July 2020 Mobile Internet Industry Ranking List”, showing that on the short video comprehensive platform category list, Douyin and Kuaishou ranked first and second respectively, with MAUs of 495 million and 268 million. Moreover, in the overall environment of declining traffic, the user scale of the two head short video APPs continues to grow rapidly, and the proportion of time spent is rapidly increasing. The growth potential of the two giants is continuously fulfilled, and the commercial value of the industry is still constantly being enlarged.
At the beginning of the development of short videos, many friends may still have a certain impression of the curiosity and even some sensational content on the Kuaishou platform, such as “firecrackers”, “raw animals” and so on.
Since then, in 2018, a large number of vulgar content such as videos of underage mothers appeared on short video platforms, which was criticized by CCTV. And Kuaishou CEO Su Hua published an apology on his official WeChat account, “Accept Criticism, Reorganize and Move Forward”, expressing that he must resolutely crack down and make clear vulgar pornography.
With the news of Kuaishou IPO, many Kuaishou concept stocks in the A-share market started trading in the afternoon of September 17th. Capital Online soared by 20% in the intraday and was once closed. Sunrise Oriental was closed. Insai Group rose. Over 7%, the mass public utilities and gravity media followed the rise. As of the close, Capital Online rose 16.28% to close at 32.50 yuan per share. Sunrise Oriental rose 5.77% to close at 5.68 yuan per share. Insai Group rose 5.34% to close at 33.72 yuan per share.
02 Actively carry out e-commerce layout
Since 2019, short video platforms have been deploying live broadcast e-commerce one after another, and the sudden outbreak of the epidemic in the first half of this year has made the advantage of the live broadcast model more obvious.
When the public domain traffic dividend period has passed and customer acquisition costs continue to increase, e-commerce has created a very high overall industry revenue scale with less than 5% of user usage time, showing clear user behavior logic and traffic transmission paths : Traffic flows in from various types of mobile APP terminals, and flows into the e-commerce platform through consumer education in the form of advertisements, and finally completes the order transaction.
Regarding this, whether it is Douyin or Kuaishou, it is clear. Since the beginning of this year, Kuaishou has made more frequent actions on e-commerce. Su Hua, CEO of Kuaishou Technology, also said that as a new format of the e-commerce industry, short video live e-commerce is ushering in rapid development.
In May, Kuaishou formally signed JD.com, and the two parties reached a strategic cooperation agreement. The two parties carried out in-depth cooperation in the supply chain capacity building, brand marketing and data capacity building of Kuaishou stores, and jointly created a new short video live broadcast e-commerce platform. Ecology.
At the same time, JD Retail will provide superior categories of goods to Kuaishou stores, and the two parties will jointly build a high-quality product pool, which will be sold by Kuaishou anchors. Kuaishou users will be able to directly purchase JD’s self-operated goods in Kuaishou stores and enjoy JD’s high-quality delivery and after-sales services.
On August 29, Kuaishou e-commerce launched a “Double Hundred” support plan for merchants in the market, and will invest tens of billions of resources. Zhang Yipeng, head of the Kuaishou E-commerce Marketing Center, gave a keynote speech called “Kaishou E-commerce Ecological Evolution” at the 2020 New List Live E-commerce Conference. Zhang Yipeng said in his speech that in order to further empower service providers and merchants, Kuaishou E-commerce will launch two new support plans.
The first is the “Double Hundred” support plan for businesses. In the next year, Kuaishou e-commerce will invest tens of billions of resource packages to create tens of billions of revenue for ecological partners and incubate 100,000+ new businesses with annual sales of over one million. The other is the service provider partner plan. Kuaishou e-commerce plans to build 100+ boutique industry belt bases, hundreds of official service providers, incubate 10,000+ industry belt mid-waist anchors, and launch 1 million+ e-commerce live broadcasts across the country.
On September 16, Kuaishou announced that Kuaishou e-commerce orders exceeded 500 million orders in August 2020, and Kuaishou e-commerce daily activity has exceeded 100 million. In the past 12 months, the total number of accumulated orders of Kuaishou e-commerce is second only to Taobao Tmall, JD.com, and Pinduoduo.
E-commerce, like advertising, is the core monetization export of short video platform traffic. The battle for this strategic highland, Douyin and Kuaishou have already begun.
03 Challenges in the future
A more mainstream view is that the short video industry has rapidly risen in recent years and gradually entered e-commerce, but it remains to be seen whether it will become the third pole.
Because, like many traffic portals in the past, short videos will have to face many issues such as the choice of advertising or self-employment, the attractiveness of ROI to the supply side, and the improvement of e-commerce infrastructure after entering the e-commerce.
At present, the layout of the two camps in the e-commerce traffic map is clear. After years of competition, it has developed into two clear camps of Ali and Tencent.
Among them, from the two dimensions of MAU and GMV, the three platforms of Alibaba, JD, and Pinduoduo are the first echelon, all with trillion-level GMV and billion-level MAU. But the three traffic sources have their own focus.
Alibaba’s flow operation mode is from outside to inside, based on e-commerce, internally perfected infrastructure construction, and externally cultivated to expand the flow circle, so as to complete the absorption of flow from outside to inland.
JD.com and Pinduoduo are both of Tencent, and Tencent’s traffic operation model is from the inside to the outside, based on social traffic such as WeChat ecology and QQ, and empowering e-commerce to carry traffic outwards, relying on social and content diversion, Tencent succeeds The support has fostered two different e-commerce platforms, JD.com and Pinduoduo.
Under the general environment where public domain traffic is peaking, short videos have become a new traffic depression under the background of increasingly fierce competition for traffic.
However, Alibaba and Pinduoduo have also been working hard in this regard. Whether it is Taobao live broadcast or Pinduoduo live broadcast, the GMV has been growing rapidly in the past two years. The number of users has continued to soar, and the viewing time has been increasing. Both the department and the Pinduoduo have shown extremely high value as the portal of e-commerce’s own traffic.
At the same time, for e-commerce, the transformation from traffic to reserved is its core competitiveness. At present, all mainstream e-commerce platforms can build barriers on the product side through different levels such as brand, category, and price. In other words, it is impossible to do an e-commerce with only traffic. For example, the most basic infrastructure logistics and customer service system of e-commerce are indispensable.
The construction of the logistics system is directly related to the performance cost and performance efficiency, and short video e-commerce from scratch still takes time. The customer service system includes a series of necessary basic service systems such as the consumption evaluation system, after-sale system, and violation detection and punishment system necessary for e-commerce shopping, and it is also difficult to establish in a short time.
Similarly, with regard to the live broadcast of this year’s fire, the view given by Laika Think Tank in the “Live Broadcast Metamorphosis” is that the current “sports” live broadcast has deviated from the essence of business, and is more like an occasion: short After the video platform seizes the user’s mind, it ultimately hopes to realize the realization of the flow of traffic through merchandise sales; for CEOs, the behavior of live broadcasting on platforms with media and social attributes is inherently in the nature of advertising and can be used for the company. Save a lot of advertising expenses.
Therefore, for short video platforms, the bottom line is the money made by advertising.
Source: Laika Think Tank