Insight - Billionaire who missed out on TikTok is trying to beat it


While TikTok tends to be stocked with photogenic, dancing teenagers, Su’s stars are a diverse, at times low-brow, crew of entertainers, often from rural regions.

IN 2017, Su Hua, the founder of a Chinese startup called Kuaishou Technology, was on the verge of closing the biggest deal of his career – the acquisition of a fledgling video service that would become TikTok.

But arch-rival ByteDance Ltd swooped in with a better offer, and Su missed out on what has become a global sensation.Now, the 38-year-old entrepreneur is getting some payback.

In February, Kuaishou went public in Hong Kong, raising more than US$5bil (RM21.14bil) on the strength of its booming video and commerce operations.

ByteDance, meanwhile, tangled with the US government and then got ensnarled in China’s tech crackdown, likely delaying its own initial public offering (IPO).

Su isn’t wasting a moment. Flush with cash from the IPO, Kuaishou is cranking up spending to close the gap with ByteDance, more than four times its size.

In this July 31, 2020, photo, people watch a performance presented by Chinese technology firm Kuaishou at the ChinaJoy expo in Shanghai.In this July 31, 2020, photo, people watch a performance presented by Chinese technology firm Kuaishou at the ChinaJoy expo in Shanghai.

Kuaishou plans to expand in countries like Brazil and Indonesia, rather than TikTok’s stronghold in the United States. The company intends to double its global squad to 2,000 by year’s end to accelerate the rollout of its international products.

Kuaishou could have an advantage over its rival in these markets.

While TikTok tends to be stocked with photogenic, dancing teenagers, Su’s stars are a diverse, at times low-brow, crew of entertainers, often from rural regions.

They include a binge-drinking farmer and a long-haul truck driver.“TikTok is a big front runner ahead of us today globally, but there’s still huge room for growth,” Su said in his first interview in four years.

“Kuaishou’s philosophy is quite different from our peers, and that’s built upon my personal experiences and values.”

To drive Kuaishou’s expansion, the entrepreneur is deploying a tried-and-tested strategy of creating the commoner’s video forum, mixing artificial intelligence-driven recommendations with human curation to deliver a personalised experience. His company aims to reach 250 million monthly users outside China this year, after tripling that base in just the past six months. It has about 300 million daily users in China.

Kuaishou’s overseas apps span Kwai to Snack Video and Zynn.

Kwai, its most successful export and the international twin to its domestic platform, has been downloaded more than 76 million times in the first half of 2021 in countries such as Brazil and Mexico, while SnackVideo built a following in markets like Indonesia and Pakistan.

This photo taken on April 9, 2021 shows social media influencer and granny Ruan Yaqing scrolling through her channel on video-sharing app Kuaishou, while editing her videos at an office in Beijing.This photo taken on April 9, 2021 shows social media influencer and granny Ruan Yaqing scrolling through her channel on video-sharing app Kuaishou, while editing her videos at an office in Beijing.

About half of its 150 million monthly overseas users now hail from Latin America, one of TikTok’s key markets.

Earlier this year, Su’s company struck a deal to sponsor the 2021 Copa América tournament, a big draw in the region. It also pledged to spend US$10mil (RM42.3mil) to incentivise sports content creators over the next year.

Like all of China’s tech companies, Kuaishou has extra motivation to expand abroad as Beijing cracks down on its domestic industry.

Chinese authorities have focused on leaders like Tencent Holdings Ltd and Alibaba Group Holding Ltd, but uncertainty over future regulations have ignited a broad market rout. Kuaishou’s stock nearly quadrupled after its debut and has since dropped near its offering price.

Orchestrating the company’s overseas push is Su’s lieutenant Tony Qiu, a former Bain Capital investor and Didi executive who helped the Chinese ride-hailing giant build its presence in Brazil.

Since joining Kuaishou last August, he’s been putting his knowledge of the local market to the test, leading a team with hires from Google, Netflix Inc and TikTok. In April, Kuaishou also welcomed on board Wang Meihong, a former Facebook Inc senior engineer, to oversee tech for its global products.

“It’s not only creative minds or young, trendy users doing lip-syncing and dancing who come to our platform,” said Qiu.

“Kuaishou is more universal.”

Take João Paulo Venancios, a 22-year-old Kwai creator living in the Paraíba state of northeastern Brazil. Since he started on Kwai in March 2020, Venancios has built a following of 2.6 million people with clips where he and his 70-year-old grandmother reenact daily life and movie scenes. It’s a fame he couldn’t have built on TikTok or Instagram, whose algorithms make it more difficult for little-known creators to go viral.

“My grandma is very funny, and we created a bond,” he said.

“People on Kwai find my videos more relatable.”

Down-to-earth

That down-to-earth nature of Kuaishou’s platforms reflects its founder’s humble beginnings. While Su now has a net worth of nearly US$9bil (RM38.06bil), he was born and raised in a small village in China’s central Hunan province.

From there, Su aced the country’s gruelling college entrance exam and won entry into the prestigious Tsinghua University, where he studied software programming, before working as a developer at Google and Baidu Inc.

“As I grew up, I saw more people who didn’t have a chance like I did,” Su said.

“So I hope Kuaishou will provide another way for them to interact with a world different from their own.”His experience drove Su to entrepreneurship: before Kuaishou, he had dabbled in more than 30 projects in areas spanning video advertising to mobile search and e-commerce.

All of them flopped. Ruby Lu, a venture investor who made an early bet in Kuaishou for DCM Ventures, spotted Su’s engineering talents then.

In 2013, he met fellow software engineer Cheng Yixiao over a dinner that lasted till 2am. Together, they transformed Kuaishou, which Cheng launched two years earlier as a GIF maker, into a video-sharing platform that featured all sorts of content, including vignettes of life in rural China.

By mid-2016, it had garnered 50 million monthly users, according to QuestMobile data.

Kuaishou won’t become another Douyin or TikTok, Su says. Even though his company is now relying more on top influencers and celebrities to juice ad and e-commerce sales, it will continue to be a platform for small creators like the street busker, pop-science writer and factory worker that Su himself follows and tips anonymously.

“We are trying to strike balance between efficiency and fairness, and we would still be the ones that give fairness the most consideration in the industry,” he said. — Bloomberg

Zheping Huang writes for Bloomberg. The views expressed here are the writer’s own.

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