Kuaishou Revamps Push Into Targeted Overseas Markets

Kuaishou Revamps Push Into Targeted Overseas Markets

For the past several years, the hottest global social media platform has undoubtedly been TikTok. According to Sensor Tower data, the short video platform owned by Beijing-based technology firm ByteDance continued a three-year streak in topping global app download charts in Q1 of this year, surpassing the 3.5 billion cumulative downloads milestone.

Within China, TikTok’s mainland counterpart – Douyin (抖音) – is also wildly popular. But there is another Beijing-based short video platform that has been engaging in a fierce competition with the ByteDance juggernaut. While less known internationally, Kuaishou (快手) has quickly swelled to become China’s second largest short video streaming app, garnering a total of 434.61 million monthly active users as of December 2021, chasing Douyin’s 612.96 million.

Founded in 2011 as a GIF-sharing site, the app later evolved into a video-streaming platform. Much of its early expansion was due to its remarkable success in rural China, with its livestreaming function becoming a popular and novel method for farmers to promote their products online.

For several years now, Kuaishou has been looking further afield. Following a largely unsuccessful globalization bid starting in 2017, the company has recently revamped its overseas business strategy, setting up targeted ventures in various regions including Southeast Asia and Latin America.

Why Kuaishou?

An interesting blog post by a user of Chinese online forum Zhihu adopts the traditional right and left-wing political perspective on resource allocation to describe the difference between the two short video apps. Whereas Douyin’s highly efficient algorithms aggressively seek out and promote the most viral content, creating a small elite group of professional creators, Kuaishou allows videos published by ordinary users to also gain exposure, leading to a more balanced distribution of viewership. Under this analogy, Douyin can be viewed as representing a right-wing competitive free market for content, and Kuaishou resembles a left-wing redistributive welfare content community.

This key distinction is reflected in the two platforms’ official taglines. Douyin’s slogan, “record a beautiful life” (记录美好生活), highlights content quality, while Kuaishou’s slogan, “see every lifestyle” (看见每一种生活), suggests a more egalitarian approach.

This fundamental difference in the algorithmic determination of who sees what on the platforms has resulted in certain demographic contrasts.

In the early years of Kuaishou’s development, its user base was dominated by China’s rural population, while Douyin was going viral in the major cities. A common phrase used to describe the type of content promulgated on Kuaishou was 土味 tǔwèi, which translates roughly as “unfashionable” or “cheesy.”

READ MORE: How Chinese Farmers Hopped Onto Kuaishou’s Bandwagon and Mined Gold

In the last several years, however, the app has been diversifying its audience. According to a report by Daxue Consulting, over 60 million of Kuaishou’s 200 million daily active users in 2019 were based in first or second-tier Chinese cities.

Another key distinction between the two apps is Kuaishou’s stronger foundation in the e-commerce and livestreaming sector. Since 2016, the platform has offered livestreaming capabilities for its users, helping merchants to promote and sell their products. In 2018, Kuaishou integrated a dedicated e-commerce channel directly within the app, which later became a crucial component of the company’s business development.

Last year, the firm launched Kwai for Business, touted as a convenient and streamlined digital campaign management platform for merchants seeking to advertise on Kwai, the overseas version of Kuaishou.

In February, the company entered a formal partnership with NativeX, a U.S.-based advertising technology company engaged in existing cooperations with ByteDance and Tencent, the operator of WeChat. While Kwai is unlikely to challenge TikTok’s dominance in key regions such as North America, the move suggests that the platform is gearing up for a long-haul push into certain targeted overseas markets, led by Latin America.

The winding path overseas

Kuaishou’s efforts to internationalize its user base has encountered mixed results over the past several years. The platform began its push overseas around 2017, enjoying initial success in certain markets including South Korea and Turkey. It also made strides in various Southeast Asian countries – particularly Indonesia – with its Snack Video app. However, low growth and user retention forced Kuaishou to reconsider its strategy, particularly following the resignation of its internationalization chief Liu Xinhua.

Some analysts contend that the firm’s lackluster overseas expansion bid was due to its over-cautious approach, especially during a time in which TikTok was growing rapidly on a truly global scale.

Following an executive reshuffle and strategic recalibration, Kuaishou set its sights overseas again in 2019, this time with a specific focus on Latin America.

“Brazil is a flagship for our company outside China,” said Mariana Sensini, Kuaishou’s Country Managing Director for Brazil, in a recent interview with CGTN America. “We began our international expansion with a strong focus on Latin America, especially in Brazil, and we already have more than 45 million users accessing Kwai every month.

The firm looks set to capitalize on the growing trend of social commerce, with the Brazilian market expected to grow 44.9% year-on-year to a total size of over $2.2 billion, according to one study.

As of last month, Kwai has also officially arrived in Saudi Arabia. In an attempt to endear itself to the local population, the app carried out a series of personalized campaigns, including by pushing a #RamadanRecipes hashtag.

After completing an IPO in Hong Kong last February, which saw the firm raise over $5.3 billion as its stocks soared 160% on the first day, Kuaishou’s share price has since stagnated, currently trading at $8.57. Moreover, a regulatory crackdown on China’s once unbridled tech sector has dampened investment, and the company has reportedly been conducting mass layoffs.

Despite these headwinds and previous failures in overseas initiatives, the promise shown in overseas markets such as Brazil, combined with continued revenue growth, suggest that Kuaishou might be getting it right this time around.

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Author: admin