Kuaishou is a popular video-sharing app established in 2011, backed by the technology conglomerate Tencent. The live-streaming revenue accounts for their largest revenue share. Kuaishou, with its about 300 million active users, is competing against Douyin (Chinese version of TikTok owned by Bytedance) and Taobao live (owned by Alibaba) on livestreaming.
The overall revenue from e-commerce livestreaming is increasing in China.
Livestreaming is a “new way” for brands to communicate with their target audience in an interactive and engaging way. You can read more about livestreaming here: https://digovation.com/2020/05/11/livestreaming-is-going-global/. In short, livestreaming means broadcasting in real time. Brands use livestreaming as a tool to promote products, increase sales and reach new customers. In China, its estimated that 9 percent of e-commerce is coming from livestreaming. Combining streaming and commerce, also called live shopping, has shown to increase impulse-buying. The conversion rate is a lot higher compared to traditional shopping.
Share of the e-commerce livestreaming market in 2019.
- Taobao live 79%
- Douyin 13%
- Kuaishou 8%
Kuaishou challenges the bigger players such as Bytedance and Alibaba, and their initial consumer and fan base are from smaller cities such as tier 3 and 4, which helps them gain traffic from “new-comers” as they are well known from urban and smaller cities. The bigger players like Alibaba and Bytedance have been more focused on the tier one cities, like Shanghai and Beijing.
JD.com and Kuaishou Partnership
An interesting partnership was formed earlier this year, right before the shopping festival 618. JD.com and Kuaishou announced a partnership, which allows users to stay within Kuaishou app to purchase products from JD.com, the second biggest e-commerce company in China. Users on Kuaishou can purchase products directly without leaving the app, streamlining the whole shopping experience. This partnership is a win-win cooperation that lets users engage with livestreams, while shopping directly in one app.
JD.com provides quick delivery and after-sales service, while Kuaishou leverage the power of livestreaming to capture a bigger user-base
What makes Kuaishou so different from other similar apps?
Kuaishou is more relationship based compared to other video-sharing app such as Douyin which is more algorithm based (Chinese version of TikTok). They showcase feeds based of people you know and follow, rather than showcasing new accounts. Douyin on the other hand, shows most of the feed with new accounts that you do not follow, but its rather based of algorithms that predict what you like. Kuaishou also has another user base, which is more focused on tier 4 cities and smaller (smaller urban cities), while Douyin is much more focused around the metropolitan cities such as Shanghai, Guangzhou and Beijing.
When it comes to e-commerce conversion, Kuaishou is also very effective compared to its competitors. According to the marketing agency Walkthechat, monthly sales via the Kuaishou platform in 2019 reached more than 10 billion RMB, with a conversion rate of over 5 times higher than its competitors. The engagement rate, the rate of which users interact on the platform, is also higher. In China, influencers are essential in attracting potential buyers. They are often called KOLs (Key Opinion Leaders). During the biggest shopping festival in China, double 11 last year, 9 out of 10 top-selling Taobao third-party live streaming were from Kuaishou.
Top industries entering Kuaishou between January and June 2020:
- Fashion
- Local services
- Home products
- Automobile
- Beauty products
- Mobile and digital products
- Education
Kuaishou offers users a highly personalized experience and encourages members from all communities to create and discover interesting and dynamic content.
– Kuaishou Technology
Kuaishou will continue to grow, and with the international tension TikTok is experiencing, Kuaishou is likely to gain further market share in the markets where Douyin (TikTok in China) is present. For international brands, Kuaishou is also a potential platform to explore, especially if you are looking to reach the younger generation in the lower tier cities in China.
Sources:
cntechpost.com/2020/06/06/chinese-video-app-kuaishou-invests-10-billion-yuan-to-build-mega-data-center/
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