What is Kuaishou?

Kuaishou (快手) is a Chinese video-sharing app, Douyin’s main rival (TikTok abroad). Kuaishou is often referred to as “Kwai” in overseas markets.

The app was born as a GIF creator. Founded in Beijing in 2011, in a few years Kuaishou has become not only one of the most important short video apps in China. Not only one of the most downloaded videos sharing applications but the biggest live streaming app worldwide. By 2019, that figure had surpassed 200 million active daily users.

Kuaishou is one of the favorite apps for the live streaming sector. To date, it is precisely the latter sector that accounts for the largest share of Kuaishou’s annual revenue. In fact, the app registered revenue of $7.2 billion in 2019 only, and more than half of these came from live streaming.

 

Kuaishou leader of live streaming e-commerce

Kuaishou is a leader of live streaming e-commerce. A striking example is that of the Kuaishou “King of sales”, Xinba, who recorded a sales record of $ 176 million in a single Livestream session.

Kuaishou actively collaborates with all the other major players in Chinese online retail. From Kuaishou it is possible to connect to platforms such as Taobao, Pinduoduo, and JD.com. And it is with the latter that Kuaishou has strengthened the partnership. From 27 May it is in fact possible to purchase JD.com products directly from the Kuaishou app.

JD & Kuaishou partnership on May 2020 for the “618 Shopping festival”

Video apps have their advantages in rich content and access to potential buyers, but e-commerce platforms have their strengths in brands, supply chain, and after-sales support.

This is a win-win strategy because through this partnership, JD hopes to reach younger customers as well as those based in China’s second-tier cities and below. In addition, the new deal allows Kuaishou users to purchase JD’s self-run products directly without leaving the short video app, offering a more streamlined shopping experience.

In this way not only lets short-video app users remain longer inside the app, encouraging more impulse buying, but also it makes those buyers who place orders through Kuaishou enjoy the same delivery and after-sales services provided by JD.

 

Kuaishou Chinese users: Young and from lower-tier cities

Kuaishou has a particularly strong user base among users outside of China’s tier 1 cities.

While most social media is dominated by a small circle of celebrities and influencers, Kuaishou amplifies the voice of ordinary people and their lives. Kuaishou users are mainly young people who come from second and third-tier cities, but also from villages and rural areas of China. Interesting data: 80% of Kuaishou users were born after 1990.

Kuaishou is trying to extend its target to the first and second-tier cities (such as Beijing and Shanghai), this by forming a solid partnership with JD.com, on which this type of user often makes purchases.

 

Kuaishou huge jump during Covid-19

Kuaishou reported a huge jump in the number of live-streaming users in the first half of this year, mainly driven by the Covid-19 epidemic that prompted wider use of the service.

The number of daily active users of its live-streaming function has reached 170 million as of June, a surge of 70 million since the end of 2019.

Before the pandemic outbreak, live streaming was only seen as an option for brands to reach Chinese consumers, but now it has become essential. The number of online live streaming service users in China reached 560 million as of March 2020, accounting for 62% of the country’s total number of 904 million internet users, an increase of 163 million since the end of 2018.

Among all the new e-businesses created on Kuaishou, there are, those in:

  • automotive,
  • smartphone,
  • home products,
  • beauty and cosmetics,
  • education sector.

Livestreaming e-commerce will become a daily aspect of a merchant’s brand, a new kind of brand marketing scenario.

 

Kuaishou vs Tiktok: Who will win?

Kuaishou’s main competitor is Douyin, which is known as TikTok outside of China. Kuaishou is similar to Douyin. The App, in fact, allows users to share their life through photos, videos, and direct streaming. However, its audience is slightly smaller, in fact it has 443 million monthly active users.

But how do these platforms differ? There are some important points where they differ:

  • Users from different areas of China

Like Douyin, Kuaishou entertains a very young audience: 80% of its users were born after 1990. But unlike Douyin, most of them come from third or fourth-tier cities. Only 10% live in first-tier cities

  • Kuaishou has a higher engagement rate than Douyin

The two apps work on the basis of different algorithms. On Douyin, priority is given to showing the user new and highly popular content on the platform (about 80-90% of the feed). On Kuaishou, on the other hand, users see proportionally much more content related to the accounts they already follow.

The first, therefore, is an App that focuses more on sharing viral and high-quality content. Often this content is created by Key Opinion Leader (Chinese influencers). The second, however, finds its strength in the social ties between users, this allows Kuaishou to have a higher engagement rate than its rival.

  • Douyin wins in advertising

In the field of advertising, Douyin has the upper hand. In fact, this is one of the most profitable ways to sponsor brands on the App. In addition to collaborations with KOL, two other advertising modes are available: Splash Ads and Newsfeed Ads. In the first case, the screen is occupied by one to for 3-5 seconds when the App is opened. In the second, the CEO is presented in the form of video in the user’s feed and can last up to 60 seconds.

Kuaishou, on the other hand, attracts fewer investments in this field. In fact, in 2019 it had around 15 billion RMB of adv receipts (about 2 billion euros). Douyin, on the other hand, reached RMB 50 billion (€ 6.4 billion).

  • Douyin and Kuaishou challenge for Chinese eCommerce

Kuaishou is increasingly imposing its voice on the Chinese social landscape. It managed to achieve very positive results during last June’s 618 shopping festival, thanks to a masterfully managed and promoted the live event and a strategic partnership with JD.com.

The method in which the e-commerce and live functions are integrated within the two platforms is very different: While Douyin is more focused on video sharing rather than live interaction than Kuaishou, on the other hand, it is much more limited in e-commerce than its rival.

In fact, Kuaishou not only guarantees up to 6 integrations with third-party platforms but also offers a store creation function that allows the consumer to participate in a live show and make purchases without leaving the platform. These reasons allow Kuaishou to achieve a conversion rate of 3-5 times higher than that of Douyin, as well as facilitating access to live streaming e-commerce for brands with more limited budgets.

 

Which platform chooses to promote and sell products: Douyin or Kuaishou?

We have seen that both the short video apps, Douyin and Kuaishou, have a different strategic approach to the market and the business model. It is therefore a matter of understanding which of the two Apps offers the best opportunities for a specific brand. This can be understood through a preliminary analysis of its objectives and targets.

Finally, we must not forget that the Chinese digital landscape is much more fragmented and competitive than the western one. Therefore, there is not a single platform that guarantees immediate success, therefore a multichannel strategy is the best choice.

 

What are the opportunities that Kuaishou offers to brands?

In recent months in the Chinese digital world there has been a lot of talk about Douyin and Kuaishou, and not without reason. The two short video apps, in fact, are climbing the charts thanks to an increasingly large audience. It seems that videos of a few seconds and live streaming are the last frontiers in the world of social networks.

But What are the opportunities that Kuaishou offers to brands?

The popularity of Kuaishou among the public is purely given by the high content proposed and the potential profit that can arise.

Sellers sell users’ attention through short videos and then profit from advertising on their accounts. Additionally, sellers can capitalize directly via live streaming. In this way, it is also easier to turn the attention of many highly active consumers to oneself. The latter, in fact, through live streaming can get closer to the product. On the other hand, sellers can show the characteristics of the different products marketed.

Another peculiarity no less important is that Kuaishou insists on promoting activities related to the traceability of the brand in various sectors, including exclusive events, to increase sales. Finally, it should be noted that Kuaishou connects directly to e-commerce platforms such as Taobao, Pinduoduo, and JD by exploiting the interoperability of the platform.

To summarize, the general advantages of e-commerce video through the Kuaishou app are purely contained in the user scale, shopping guide, product performance, and purchasing experience.

In addition, the recent 618 promotions have revealed that even much higher price range products can find a huge market in the Kuaishou audience, therefore having a starting presence within Kuaishou therefore could seriously prove to be a great strategic move.

gma agency

In order to promote your brand and if you have any questions related to how to market your products by using Kuaishou, contact GMA now!

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