Text/Mantis Finance (ID: TanglangFin)
Author/Chen Xiaojiang
On the last day of 2020, Luo Zhenyu will hold a New Year's Eve speech party in Wuhan, with the theme "After Growing Up". The day before this, Kuaishou held an all-staff meeting, announcing that it will start the all-staff work system on January 10, 2021, further accelerating all staff.
The two seem to be unrelated, but the connection is very interesting-the fast hand, who was once labeled a "slow company", is accelerating and getting faster when he grows up.
On November 5, 2020, Kuaishou, which has been established for 9 years, submitted a 733-page IPO prospectus on the Hong Kong Stock Exchange, announcing to the market that Kuaishou grew up.
On January 14, Kuaishou passed the Hong Kong Stock Exchange listing hearing and plans to go public in the first week of February. From January 18, the sponsor team of Kuaishou listing will begin an analyst roadshow, and then Kuaishou will officially enter the IPO stage.
Pressing the IPO accelerator key and taking the lead in the race to become the "first domestic short video stock" is the most important sign that Kuaishou will become faster in 2020, and "being faster" is the main theme of Kuaishou's development in 2020.
At the beginning of 2020, after spending money to obtain the exclusive interactive cooperation authorization for the 2020 CCTV Spring Festival Gala, Su Hua said, "I am looking forward to the fast hand to further'grow up', to pull the peak through the Spring Festival Gala, and see our limits in terms of products and organization. Combat ability." And the rare tough and big battles of the Spring Festival Gala also force the quick players to get up quickly.
After the Spring Festival Gala, Kuaishou’s daily life smoothly exceeded 300 million, completed the K3 campaign goal, and set the tone for the entire 2020 to become faster.
From the launch of Kuaishou 8.0, Kuaishou Xiaodiantong, Haowu Alliance, to the upgrade of Magixing (formerly Kuaishou) and Kuaishou noodles, to the introduction of many talents from Internet companies and the establishment of a new economic management committee. Attract stars from all walks of life, including Jay Chou, Zheng Shuang, Ronaldo, etc., to reach strategic cooperation with JD.com and expand industrial belts across the country. It can be seen that throughout 2020, Kuaishou has accelerated in all aspects.
Kuaishou becomes faster and accelerates towards "money"
If we look at all the faster actions of Kuaishou in an abstract, Mantis Finance believes that it can be boiled down to one point, that is, Kuaishou, which will become faster in 2020, is accelerating toward "money"—accelerating IPOs in order to get closer to "money". Speeding up commercialization is to speed up making money. And to accelerate the construction of the industrial chain, the content ecological chain, and marketing promotion is to accelerate the "spending money."
Needless to say, speed up the IPO. In the current anxious competition in the short video industry, seizing the opportunity to become the first stock in the industry is not only a symbol of strength, but also attracts more capital attention, creates more voice, and forms a habitual label in users and capital markets to get the first move. Advantages and initiative. On the contrary, post-listers may be subject to stricter scrutiny and treatment by the market because they have reference targets, just like Huya and Douyu before.
In terms of accelerating earning money, Kuaishou’s main sources of revenue are live broadcasts, online marketing services, and other businesses including e-commerce. The performance of Kuaishou's live broadcast business in 2020 is still outstanding, with both revenue and monthly paying users increasing.
According to the prospectus, as of September 30, 2020, Kuaishou Live’s revenue in the first three quarters of 2020 was 40.7 billion yuan (31.4 billion yuan in 2019). During the period, there were 59.9 million paying users per month, which is an increase compared to the 48.9 million paying users per month in 2019.
According to the statistics from iResearch, the live virtual gift reward industry will maintain an annual compound growth rate of 19.9% from 2019 to 2025. At present, Kuaishou has 170 million live live users, and the growth potential of the live broadcast business is still huge.
E-commerce and commercialization (online marketing services) are the two new engines of Kuaishou. In 2020, for e-commerce business, Kuaishou will focus on expanding its scale. For online marketing services, it accelerates the process of opening up public and private domain traffic and improving the commercialization efficiency of global traffic.
In terms of e-commerce, the prospectus shows that in the first three quarters of 2020, the GMV of Kuaishou e-commerce reached 204.1 billion, of which GMV in the third quarter reached 94.5 billion. As early as August 2020, Kuaishou announced that e-commerce orders exceeded 500 million, becoming the fourth pole of e-commerce after Taobao Tmall, JD.com and Pinduoduo. At the same time, Kuaishou e-commerce daily activity exceeded 100 million, the number of active merchants on the platform exceeded 1 million, and the monthly repurchase rate of e-commerce was as high as 65%.
With regard to the expansion of e-commerce scale, Kuaishou has accelerated its deployment in many aspects from the human and cargo market.
On the one hand, Kuaishou has expanded dozens of industrial belts across the country in the past year, and has continuously promoted strategic cooperation with JD.com, such as launching double tens of billions of subsidies at major promotion nodes such as 616, 99, and 116, and jointly building a live broadcast base. It also released the "Double Hundred Plan" to increase support for official service providers and mid-waist anchors in the industrial belt, opening up a four-party supply chain system for brands, factories, farms, and talents.
On the other hand, Kuaishou has launched a number of new products to promote the development of e-commerce. Such as the launch of the commodity distribution library "Good Goods Alliance" for small and medium businesses that lack commodity supply capabilities. "Xiaodiantong", a traffic promotion tool that can increase fans and increase transaction conversions for fast hand e-commerce anchors, and launched a supporting data analysis platform "Business Link" to provide data analysis in live broadcast, transaction, traffic and other links.
For online marketing services, Kuaishou launched version 8.0, and iteratively upgraded marketing service products. For example, the launch of Kuaishou 8.0 has upgraded the main interactive interface of the product, compatible with dual-column click and single-column up and down browsing modes, and further opened up Kuaishou public domain traffic and private domain traffic.
The two major marketing products Magixing (advertiser service) and Kuaishou vermicelli (content creator service) have been upgraded to access public domain traffic on the basis of private domain traffic distribution, allowing fast online revenue service revenue to rise rapidly. According to the prospectus, the revenue of Kuaishou in the first three quarters of 2020 was 13.3 billion yuan, accounting for 32.8% of the company's total revenue in the first three quarters.
At the same time, Kuaishou also updated the brand logo and released a new Slogan, upgrading from "seeing every life" to "embrace every life". And for the first time clarified Kuaishou's corporate values "Kaishou Pai"-"obsessed with creating value for customers" as its mission. Let users change from "observers" to "participants", from focusing on users to focusing on users and customers, highlighting the two-way interaction and customer value.
This series of changes makes Kuaishou's upgrade in 2020 the biggest upgrade since its transformation from a GIF tool to a short video community in 2014.
As for accelerating "spending money", Kuaishou will not hesitate to make strategic investments in 2020. Mainly in the following aspects.
On the one hand, in terms of brand marketing, such as the acquisition of the exclusive right to interact with the CCTV Spring Festival Gala in 2020, the "Kaishou One Thousand and One Nights" large-scale evening party jointly created by Jiangsu Satellite TV at the Double 11 promotion node, etc., has accelerated the brand upgrade and Break the existing ecosystem and expand outward.
On the other hand, in terms of talent introduction, in 2020, Kuaishou will successively introduce many top and waist Internet talents including companies such as Ali, Tencent, Didi, Meituan, and ByteDance. Not long ago, a new term of the Economic Management Committee was established, and a number of first-level leaders were added to implement the management level system.
In terms of content ecological construction, Kuaishou has changed its previous attitude of "Buddhism" and attracted many leading stars such as Jay Chou, Zheng Shuang, Ronaldo, Yang Mi, Huang Bo, Zhang Jie, Shen Teng, etc., which is conducive to improving the overall platform. Sex, leveraging broader commercial value.
In addition, Kuaishou has also made strategic investments in e-commerce infrastructure and ecological construction. Including the aforementioned expansion of the industrial chain across the country, a strategic cooperation with JD.com, launching a series of double tens of billions of subsidy activities to provide traffic and funds to support the development of small and medium-sized businesses and waist anchors in the industrial belt.
The prospectus shows that in the first half of 2020, Kuaishou's sales and marketing expenses totaled 13.7 billion yuan, an increase of 354.1% compared to 3 billion yuan in the same period last year. It can be said that Kuaishou, which has been in existence for 9 years, has begun large-scale strategic investment for the first time in the Internet field, which is "burning money". Its desire to become faster is obvious.
Coupled with investment in technology research and development and other aspects, Kuaishou has seen its first adjusted loss of 6.35 billion yuan in the first six months of 2020. However, this kind of loss narrowed rapidly in the third quarter. According to the prospectus, the adjusted net loss of Kuaishou in the first three quarters of 2020 was 7.39 billion yuan. Calculated on the basis of an additional loss of 1.04 billion yuan in the third quarter, the average monthly loss was less than 350 million yuan, which was significantly narrower than the 1.06 billion yuan per month for the half-year period.
In general, Kuaishou in 2020 has undergone a series of upgrades from products, operations, promotion to corporate organization and values, and the core of the upgrade can be understood as the acceleration of “money”.
Who is pushing Kuaishou to become faster?
So, who is pushing Kuaishou to become faster?
Luo Zhenyu mentioned in his New Year's Eve speech, “In the past, we used to say that scale is the antidote to all problems. Many problems will be solved by increasing the scale. However, in many cases, scale is also the root of the problem.”
For Kuaishou, after 9 years of development, from the initial Gif tool to the video content community, and then to the comprehensive ecology integrating short video, live broadcast, e-commerce and many other formats, it is difficult to simply use short video to describe today. Fast hand. Today, it is not only a video-based content platform, but also has strong social attributes, has enviable private domain traffic, and has grown into the fourth pole of e-commerce...
(Kaishou ecological sketch, the picture comes from the Internet)
It can be seen that scale has long been not the main issue for Kuaishou. More important is the scale itself-under the premise of such a scale, how to improve the commercial capacity expansion capabilities of the Kuaishou platform, maximize traffic and user value, and diversify revenue.
In 2019, Su Hua and Cheng Yixiao said in an internal letter to all employees of Kuaishou that "slow company" is becoming the label of Kuaishou, which made them feel deeply disturbed, and proposed a solution for this-Kuaishou can no longer be "Buddha". "Going down, getting faster and becoming more wolfish has become the key to solving the problem.
Therefore, it is inevitable for all companies to "grow up" when Kuaishou grows faster, and it is also the initiative to seek change after Kuaishou grows up.
If Su Hua and Cheng Yixiao were sending an internal letter to all Kuaishou employees in 2019, they realized that Kuaishou would change from "achieving a great product to becoming a great company", then in 2020, this idea will be implemented in detail. Of the year.
Because when a company goes public, its ability to spend money and its ability to make money become equally critical. After all, in the capital market, talking about feelings without talking about commercial realization is a hooliganism. After going public, money will not be spent, which is also a lack of ability.
A series of actions taken by Kuaishou in 2020 demonstrated its abilities in these two aspects. From the perspective of market feedback, its market value valuation has risen from the rumored US$28.6 billion at the end of 2019 to the current US$50 billion, which can be regarded as market recognition.
Of course, in addition to actively seeking change, what is driving Kuaishou's change is the passive acceleration due to intensified industry competition.
On the one hand, from the perspective of the industry, the user growth of the short video industry is entering the middle and late stages, and the traffic dividend is disappearing. Improving the value of traffic and platform users becomes the key, and accelerating commercialization becomes the next focus. According to data from QM's "2020 China Mobile Internet Autumn Report", by September 2020, the number of monthly active users in the short video industry reached 859 million, and the year-on-year growth rate has gradually slowed down.
At the same time, when the user bonus disappears, the penetration rate of all parties is accelerating. Compared with the 600 million daily active life of Douyin (including Douyin Volcano version), there is still a gap of 300 million daily active life of Kuaishou, but Kuaishou is not without opportunities.
With the increase in user overlap between platforms, it means that the next user battle in the industry has shifted from racing to mutual penetration. Compared with Douyin's penetration space for Kuaishou, Kuaishou's penetration space for Kuaishou is obviously greater, especially with the arrival of head stars such as Jay Chou and Zheng Shuang, which brings new opportunities for Kuaishou.
In addition, with the rapid rise of video accounts, the value and potential of short videos based on social recommendations have been amplified, and the recognition from the market to users will also be released. This is also a good opportunity for Kuaishou, who also has social attributes, so Kuaishou took the opportunity to increase marketing and promotion efforts.
On the other hand, from the perspective of commercialization capabilities, Douyin has taken a strong operation and commercialization route from the beginning. This is an important reason for its rapid rise, but it has also overdrawn the space for its subsequent commercialization. In 2020, Douyin will accelerate its efforts in the field of live e-commerce, and the search for new additions is also based on this.
It can be seen that Kuaishou accelerates the commercialization of online marketing services, which is essentially logically similar to Douyin plus e-commerce, that is, to increase the flow rate and revenue diversification. For Kuaishou, it is necessary to open up public domain and private domain traffic. For Douyin, it is to build a better atmosphere of social trust.
With the launch of Kuaishou 8.0, the growth of users of Kuaishou Speed Edition, and the upgrading of online marketing products, the commercialization potential of Kuaishou online marketing services is gradually being released. The enhancement of commercialization capabilities will attract more content creators, merchants, and brand owners to join Kuaishou.
Therefore, behind the faster speed of Kuaishou, in addition to the qualitative change of its own scale and the need for listing, the changes in user growth logic brought about by industry development, the urgent need for commercialization capabilities, and the card slots in the field of live e-commerce are all due to the faster Behind the push hand.
Fast hands, do you need to be faster?
Kuaishou after the fast-tracking in 2020 did not disappoint.
According to prospectus data, in terms of users, in the nine months ended September 30, 2020, the average daily activity and average monthly activity of Kuaishou China's apps and mini programs were 305 million and 769 million, respectively. Among them, the Kuaishou speed version alone allowed daily life to exceed 100 million in more than a year.
In terms of revenue, the total revenue of Kuaishou in 2019 was 39.1 billion yuan, and in the first three quarters of 2020, its total revenue was 40.7 billion yuan, which surpassed last year's revenue in just three quarters. The most important thing is that the revenue structure is more diversified-the proportion of online revenue service revenue has increased, and the rapid expansion of e-commerce scale has brought new revenue imagination space, which has made Kuaishou more stable.
The data shows that from 2017 to 2019, the revenue of Kuaishou live broadcast business accounted for 95.3%, 91.7%, and 80.4% of total revenue, respectively, and the proportion of online marketing service revenue was 4.7%, 8.2%, and 19%, respectively. . As of September 30, 2020, the two accounted for 62.2% and 32.8%, respectively, of which 37.8% of the revenue of the non-live broadcast business company, and the revenue diversification is becoming more and more obvious.
So, in 2021, does Kuaishou need to become faster? The answer is yes.
First, as far as the short video track is concerned, after Kuaishou submitted the IPO prospectus, Douyin also urgently released its plan to IPO, which shows the importance of grabbing the IPO competition point. The video account achieved a rapid explosion after it went online, proving that social + short video has great prospects. The entry of the video account will also increase the awareness of businesses and users of social networking + short video live broadcast, which is a new opportunity for Kuaishou to accelerate user acquisition. After the listing, Kuaishou will acquire more market resources. Taking advantage of the TikTok is not yet on the market, Kuaishou can form a dimensionality reduction offensive and accelerate development and penetration.
Second, as far as live e-commerce is concerned, the scale of the live e-commerce market in 2020 is close to one trillion and is still growing steadily. At present, Kuaishou live broadcast e-commerce is second only to Taobao live broadcast, and compared with Taobao live broadcast, Kuaishou’s advantage lies in private domain traffic and social attributes, and the disadvantage is insufficient supply chain. Kuaishou still needs to speed up its layout in the supply chain, and take advantage of the dividends of the new generation of content e-commerce, with first-mover advantages, to widen the distance with latecomers.
When it comes to Kuaishou live broadcast e-commerce, many people may be impressed by the big families of Kuaishou and think that it is the big families that have supported Kuaishou's live broadcast e-commerce, which is not the case. With the help of the "inclusive" mechanism, the diversification trend of Kuaishou anchors is very obvious.
Take the Simba family as an example. According to statistics from the third-party data platform Gecko, the GMV of the Simba family from January to June 2020 was 6.5 billion, and the GMV from July to September was 5.761 billion. The total GMV in the first 9 months was 12.261 billion. yuan. During the same period, the GMV of Kuaishou e-commerce in the first three quarters of 204.1 billion, the Simba family accounted for only about 6% of the total GMV of Kuaishou e-commerce. It can be seen that the external rumors that the Simba family contributed 50% of the GMV of Kuaishou e-commerce are not accurate.
In fact, there are many anchors with strong ability to carry goods in Kuaishou. Only in November 2020, according to the data from Gecko, Shijiazhuang Ruijie, Mijie, Kwai'er, Ahao, Super Dan and many other anchors have singles. The market GMV has exceeded 100 million in shipments. In terms of the revenue of the Kuaishou live broadcast virtual gift, the live broadcast revenue of the six Kuaishou families accounted for less than 5% of the total rewards in Kuaishou. This kind of inclusive and diversified ecology is the advantage of Kuaishou, and Kuaishou also needs to further accelerate its amplification.
Third, although the scale of Kuaishou live broadcast e-commerce is large, the monetization rate of e-commerce is not enough. This is related to Kuaishou's vigorous efforts to cultivate and support e-commerce ecology. For example, the introduction of double tens of billions of subsidies to support businesses and anchors with traffic and funds, and expand the industrial belt. Therefore, how to continue to expand the scale while increasing the monetization rate of live e-commerce requires Kuaishou to further speed up.
Fourth, in the Kuaishou prospectus, e-commerce, online games, value-added services, etc. are consolidated into "other income". This income will be approximately 810 million yuan in the first half of 2020, accounting for only 3.2% of total revenue. As of September 30, 2020, the revenue of Kuaishou has reached 2 billion yuan, an increase of about 1.22 billion yuan in the third quarter, which shows that the growth rate is very fast. However, from the overall scale, it is still a business that Kuaishou needs to accelerate its development. Needless to say, the e-commerce business has great potential in gaming.
As early as November 2019, the daily live activity of Kuaishou game live broadcast reached 51 million, surpassing the combined daily live activity of the two major game live broadcast platforms Huya and Douyu, and the daily live activity of game short video reached 77 million. By June 2020, the daily activity of short videos of Kuaishou games will exceed 90 million, and the gaming business is obviously another key point that Kuaishou needs to accelerate.
Fifth, with the outbreak of short dramas in recent years, short video platforms such as Kuaishou Douyin have become the fourth pole of drama pursuit. Take Kuaishou as an example. From the establishment of the "Kaishou Little Theater" to the launch of the "Kaishou Skit" brand, Kuaishou Micro Skit has developed rapidly. According to the "2020 Kuaishou Skit Ecological Report", the Kuaishou Little Theater currently contains more than 20,000 skits, of which more than 2500 episodes have been played over 100 million. This is another key point for Kuaishou to accelerate its efforts.
All in all, from the current trend, video content is expected to become the super connector of the Internet in the future. Under this trend, thanks to high-quality private domain traffic, social attributes, and inclusive principles, Kuaishou has laid a solid foundation for the development of diversified businesses such as e-commerce, advertising, games, and micro-series in the past 9 years. Today's Kuaishou only owes "being fast".
*The pictures in this article are from the Internet
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