36-year old Lin Yanqiong left her home in a small village in China’s central Hubei province to become a migrant worker at the age of 15, moving across the country to take a variety of jobs, including a nurse, waitress and masseuse.
Her relatively underprivileged life changed though when she watched a streaming show by online celebrity Xinba, a guy who sold 1.25bil yuan (RM780.99mil) of products in a single livestreaming session on Kuaishou, a short video app she enjoys watching. She was shocked.
“I thought livestreaming was just for beautiful girls to sing, dance and sweet-talk in front of the camera and to receive virtual gifts from their fans,” said Lin. “I didn’t realise that people can actually... make [real] money on Kuaishou.”
Determined to give it a try, she paid a few thousand yuan to get online training on how to host a livestream and how to make good videos. Then she started to upload short videos giving tips on how to manage their careers.
In less than two months, she had 100,000 followers and soon started to offer private tutorials on how to make good videos for those who had bought 288 yuan (RM180) worth of virtual gifts during her livestreams. “People like me can also gain followers and teach others [thanks to Kuaishou],” she said.
Lin says she has made over 100,000 yuan (RM62,523) in less than 12 months on Kuaishou, which translates as ‘speedy hand’ in English.
By offering a place to shine for millions of underdogs like Lin, Kuaishou has grown from a small video app developed in a small flat into the world’s second-largest short video platform. It has changed how many Chinese people spend their leisure time and interact with each other – even the term ‘Lao Tie’, a term of endearment for the fans of livestream hosts, has become an everyday expression.
Tencent-backed Kuaishou, set to raise up to US$5.4bil (RM21.85bil) next month in Hong Kong‘s biggest initial public offering in more than a year, has 264 million daily active users, less than half that of its major competitor Douyin, the Chinese version of TikTok run by ByteDance, which has 600 million. Nevertheless, Kuaishou is seen by many analysts as a pioneer that has helped drive the popularity of short videos in China.
Cheng Yixiao, the 30-something low profile founder of Kuaishou, said in rare public comments in December 2018 that Kuaishou was there for most people who do not have a platform to showcase their talents and skills to the world. “Kuaishou is not for movie stars or Big V [key online opinion leaders] but for most ordinary people,” Cheng said.
But this formula of providing a forum for ordinary people to show off their talents also creates a challenge for Kuaishou if it is to attract investors – how to make money and generate sustained profits from a user base with relatively modest incomes.
The most popular video content on Kuaishou is often based on the daily lives of ordinary people – at work and at home – rather than in a studio. A typical example is the streamer known as China’s ‘useless’ Edison, who gained over 10 million followers by hosting hilarious videos about his crazy inventions like a toilet built into a scooter that flushes when you pull a lever on the handlebar.
Li Quangen from Baicheng city in China’s Jilin province, says he watches Kuaishou every day and also shares videos about his life as a construction worker drilling wells and laying bricks.
He posted 95 videos in 2020, mostly clips of the construction sites he was working in and the food he likes to eat. Li, in his 40s, says he watches Kuaishou for fun and to learn new things.
“I search on Kuaishou for information, like how to obtain a driving licence,” said Li, adding that he also makes friends with people in the same trade or who have common interests.
He Baoguo, a 30-year-old taxi driver in Shanghai who originally hails from China’s Gansu province, said watching Kuaishou is his way to relax after a long day at work, which can run from 8am in the morning to 11pm at night.
“Everyone is either on Kuaishou or Douyin... my mom now watches Kuaishou every day, buys clothes on it and learns new things.”
Joycelyn Niu, 24, a finance professional in Hong Kong, said she watches a live-streaming show by a Kuaishou idol called “Teacher Guo” every night. Guo, a woman from rural China, livestreams a typical day in her life in the countryside, and has garnered 4.8 million followers on the platform.
Niu says watching the show allows her to peer into a life far removed from her existence in Hong Kong. “It’s always fresh to me,” said Niu.
While this inclusiveness has helped Kuaishou to attract a loyal online fan base in a competitive sector, some analysts suggest it may be a factor behind why it has been slow to build up revenue growth.
“The data we look at still points to that fact that Kuaishou users are typically based in lower tier cities... and we don’t see large high fashion, luxury and beauty key opinion leaders moving on to Kuaishou,” said Elijah Whaley, vice-president of marketing, APAC, at branding data intelligence firm Launchmetrics.
The company said last July that users in tier-one and tier-two Chinese cities accounted for 45% of its user base, compared with a 30% share a year ago. But this increase came with a big marketing bill, the main reason behind its operating losses in the first half of 2020. The move also saw it team up with Chinese celebrities, an approach at variance with its original vision.
According to the company’s prospectus, virtual gifting in livestreaming – where fans buy virtual presents for their online idols – account for 62% of Kuaishou’s total sales, while online marketing and advertising services generate 33%. Going forward, Kuaishou is putting more emphasis on livestreaming e-commerce, a breakthrough channel for shopping in China during the pandemic.
The gross merchandise value (GMV) of livestreaming e-commerce on Kuaishou totalled over 333bil yuan (RM208.20bil) in the first eleven months of 2020, surging from 60bil yuan (RM37.51bil) in full-year 2019 and a negligible amount in 2018.
Analysts at Orient Securities, a brokerage in Shanghai, wrote in a research note that Kuaishou is not only a platform for people to have fun but also increasingly a place for people in small Chinese towns to shop. While 70% of Kuaishou users are under 30, half of those who actually buy things on Kuaishou are older than 30, the report noted.
However, some analysts say that Kuaishou’s success in developing a core fan base in lower tier cities – which have not been mined as much by big tech and e-commerce firms to date – could be a silver lining in the long run.
Small Chinese cities and countryside users could be a huge asset for the company in terms of e-commerce with Pinduoduo following this strategy successfully, and according to Vey-Sern Ling, an analyst at Bloomberg Intelligence, this could prove “an advantage rather than a hurdle”. – South China Morning Post
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