Text | Blue Shark Consumption, Author | Chen Shifeng, Editor | Lu Xucheng On June 6, 2024, Kuaishou celebrated its 13th birthday. In the past 13 years, Kuaishou has successfully transformed from a tool application for making and sharing GIFs to a short video platform. From obscur

article | Blue Shark Consumption, author | Chen Shifeng, editor | Lu Xucheng

On June 6, 2024, Kuaishou celebrated its 13th birthday.

In the past 13 years, Kuaishou has successfully transformed from a tool application for making and sharing GIFs into a short video platform. From obscurity to being noticed by mainstream public opinion, from the commercialization of Buddhism to accelerating live streaming, it has become China’s short video An important "pole" in the platform.

According to the first quarter performance report of 2024 released by Kuaishou not long ago, the average daily active users of Kuaishou applications increased by 5.2% year-on-year to 394 million, and monthly active users increased by 6.6% year-on-year to 697 million. The user scale reached a new high. What is particularly noteworthy is that Kuaishou’s adjusted net profit in the first quarter was 4.39 billion yuan, a record high in a single quarter. It seems that it has found its own profit direction.

But what is noteworthy is that Kuaishou’s market value has been falling. As of the close of trading on June 13, Kuaishou's market capitalization was only HK$222.274 billion, down HK$1.5 trillion from its peak. China's top five Internet companies have become a thing of the past.

If you include Internet unicorns such as Douyin, titok, and Ant Financial that have not yet been listed, Kuaishou may be "removed" from the top ten Internet companies in China.

Behind the decline in Kuaishou’s market value is the decline in its dominant position as a short video platform. According to questmobile data, as of September 2023, the number of active users of the five typical new media platforms, Douyin, Kuaishou, Xiaohongshu, Bilibili, and Weibo, has reached 1.088 billion, and the penetration rate has reached 88.9%. The echelon situation has basically formed. Among them, Douyin takes the lead with 743 million monthly active users. Weibo and Kuaishou in the second camp have 485 million and 457 million monthly active users respectively. Bilibili and Xiaohongshu rank in the third camp with monthly active users respectively. 210 million and 199 million. If video accounts (more than 800 million monthly active users) are included, Kuaishou’s monthly active data may only rank third. The decline in

short video traffic has also affected Kuaishou’s commercialization pace to a certain extent. Taking the e-commerce business with high hopes as an example, according to weathervane statistics, the gmv data of China's mainstream e-commerce platforms in 2023 is: Alibaba 7.7 trillion, Pinduoduo 4 trillion, Jingdong 3.5 trillion, Douyin 2.7 trillion , Kuaishou 1 trillion. There is a huge gap between Kuaishou, which ranks fifth, and the top four e-commerce platforms.

In the past 13 years of development, what has Kuaishou done right? What did you miss?

The four successful nodes

As we all know, the predecessor of "Kuaishou" is "Gif Kuaishou", an animation generation tool founded by Cheng Yixiao's team in 2011. During the GIF Kuaishou era, with the help of the spread of animated images on Weibo, the company once reached tens of millions of monthly active users. Therefore, in 2012, Kuaishou attracted an angel round investment of US$300,000 from Zhang Fei of Morningside Capital (later Wuyuan Capital).

But for Zhang Fei, what he is interested in is not the animation generation tool itself, but the possibility of communities and social platforms that its powerful monthly activity can generate. With Zhang Fei's help, Su Hua and Cheng Yixiao "met" and hit it off immediately, eventually forming an entrepreneurial team.

Since then, Kuaishou has ushered in its first key node - in 2014, Kuaishou cut off the GIF conversion function and greatly streamlined the interface and functions. At the same time, Su Hua applied its recommendation algorithm to content distribution to improve user experience. Improved immediately.

With this, Kuaishou transformed from a video tool software to a video social software, and a community was derived from it, giving it a basic foundation for survival. looks back at the history of the development of the Internet. Platforms that have transformed from tools to social platforms, such as Tencent, almost have their own moats, while tool software such as Xunlei and Baofeng Video have mostly gone silent. By 2016, Kuaishou’s registered users exceeded 300 million, and its daily active users reached about 60 million, making it the top short video platform in China.

is building a short video community. The Kuaishou team believes that the most important thing is how the underlying value is reflected in the community. Unlike other platforms, the biggest difference between Kuaishou and Kuaishou is that users on Kuaishou regard live streaming as part of their lives, not as work.Everyone has their own story. Different people’s living conditions are very different. Everyone is constantly solving various problems, conflicts, contradictions, etc. Life is full of challenges. This is what Kuaishou has always advocated. The starting point of Hui values.

Under the guidance of inclusive values, in order to avoid excessive traffic polarization in the community ecology, Kuaishou introduced the concept of "Gini coefficient" in the content distribution strategy to regulate, including the number of short video views, number of comments and likes, All have binding assessments based on the Gini coefficient.

As a result, Kuaishou gradually established a decentralized ecosystem. At that time, the mainstream social platforms/media platforms were highly centralized and more friendly to high-line market users, while low-line market users expressed themselves, recorded and The need to share life is a blank market. The emergence of Kuaishou precisely meets the social needs of users in the low-tier market, and it has developed rapidly by capturing the "people outside the Fifth Ring Road".

At that time, many investors and audiences in first- and second-tier cities may have difficulty understanding Kuaishou. In fact, with its unique "old iron culture", Kuaishou has built a community with a strong social atmosphere. Judging from the data, Kuaishou has more than 9 billion pairs of users who follow each other, and the number of likes and comments on short videos and live broadcasts is also eye-catching.

In addition to the satisfaction brought by the content, Kuaishou's "old iron culture" allows users to gain a sense of social identity and group identity. Social relationships usually have obvious network effects, which will gradually accumulate once formed, and the migration cost is high. This means that it is difficult to separate users from Kuaishou. Big anchors such as Simba want to "escape" from Kuaishou, but they cannot take their own relationship chain with them, so it is always difficult to "break the circle" on other platforms.

At the same time, social relationships have also brought unique user stickiness and moat to Kuaishou. On the one hand, it can improve user retention and platform enthusiasm through social relationships, and enhance user loyalty and stickiness to the platform; on the other hand, social and community relationships are naturally easier to form a sense of trust and mutual recognition, which will help Kuaishou Live Broadcast develop The development of reward and live broadcast e-commerce business. The Laotie community is the foundation for Kuaishou’s commercialization.

After 2019, Kuaishou accelerated its business journey and became the second largest gmv live broadcast e-commerce platform in the world that year, becoming the fourth largest e-commerce player in China. According to Kuaishou's prospectus, Kuaishou's e-commerce transaction volume reached 204 billion yuan in the first nine months of 2020, second only to the three e-commerce platforms Taobao, JD.com, and Pinduoduo, making it one of the leading players in China's Internet e-commerce business.

is equipped with the east wind of live streaming to bring goods. In February 2021, Kuaishou successfully landed on the Hong Kong Stock Exchange and ranked first in short video stocks.

"Kuaishou has no soul?"

From the founding of gif Kuaishou in 2011 to the launch of Kuaishou app in 2013, Kuaishou can be said to be the originator of the short video platform. At that time, Kuaishou had almost no opponents. (Weshi followed the trend in 2013 but the product was not strong, and Douyin will not be launched until the end of 2016).

However, Kuaishou "got up early, but rushed to a late gathering" . Before 2016, Kuaishou had almost no exploration of commercial monetization. It only launched a live broadcast function in April 2016 and relied on virtual gifts from users to obtain a small amount of income. However, Kuaishou Live has entered the game very late. Previously, Huya and Douyu had already occupied a certain amount of the live broadcast market. During the same period, there were "multiple attacks" from Huajiao, Huoshan, etc. For more than a year, development has been tepid.

At that time, Kuaishou had only a few hundred internal employees, almost all of whom were technical personnel, and had no basic team for commercial promotion. Another reason may be that the audience of “people outside the Fifth Ring Road” also makes some brands reluctant to advertise on Kuaishou. But the "Buddhist" Kuaishou soon faced a wolf-like opponent.

In 2016, Douyin emerged as a community focusing on 15-second music short videos for young people. It quickly became popular among young people through variety shows, subway ads, and elevator ads. In June 2018, Douyin’s domestic daily active users exceeded 150 million, and its monthly active users exceeded 300 million, surpassing Kuaishou to occupy the top spot in the short video industry. It took Douyin more than a year to surpass Kuaishou’s 7 years of hard work.

changed from a "leader" to a "follower", and the lagging Kuaishou began to consciously imitate Douyin. The K3 campaign at the end of 2019 was the most intense. The "Buddhist" Kuaishou clearly proposed a goal of 300 million daily active users, setting off a top-down rapid recruitment campaign.

While chasing Douyin, Kuaishou's crowd has generalized, expanding from the original low-tier cities to people at all levels, losing its original unique "territory" - the sinking market. In terms of content, Kuaishou and Douyin are also obviously homogeneous, and new users have lost a strong reason to choose Kuaishou. Today, Kuaishou seems to have lost its label - when we mention Kuaishou, what do we think of? Maybe nothing. Pinduoduo has a sinking market, Meituan has food delivery, what does Kuaishou have? Are you old guys still tough? As

competes with Douyin, Kuaishou is also gradually accelerating commercialization. In addition to using "old iron culture" to monetize live broadcast rewards, live broadcasts are also used to bring goods. On November 6, 2018, Kuaishou held its first e-commerce festival. The anchor "Sanda Brother" shocked the industry by delivering 160 million yuan in goods for 10 hours. Subsequently, the Simba family rose rapidly and started a love-hate game with Kuaishou.

While Kuaishou is working hard to promote live streaming, its original flaws are gradually exposed. In contrast, Douyin has a strong operating model, which is supported by both AI algorithms and manual operations, so it is easier to monetize in terms of commercialization. Kuaishou is different. Its main method of content production is UGC, which is then distributed through a decentralized algorithm, causing top anchors to become "traffic kingdoms" on the Kuaishou platform.

For a long time, big anchors such as Simba have been very strong on the Kuaishou platform, which has caused a lot of trouble to Kuaishou. On the one hand, many of Kuaishou's big anchors are from the "grassroots" and are very extensive in content production. Some novelty and other content bring very serious regulatory risks to the platform. On the other hand, big anchors bringing goods through their own private domains will also eat into the share of Kuaishou e-commerce.

In recent years, Kuaishou has taken advantage of its huge traffic to develop live streaming e-commerce. For this reason, it even cut off external links such as Taobao at a certain period. But e-commerce has never been as simple as traffic. The key is the supply chain, ecology, and pre-sales, during-sales and after-sales service product groups. This cannot be accomplished overnight. Kuaishou, which has been "entangled" with big anchors, has "neglected" e-commerce infrastructure construction and merchant governance to a certain extent, and it is difficult to find its own clear positioning in the fiercely competitive e-commerce industry.

Since the live broadcast of goods, there have been constant rumors about Kuaishou's "counterfeit sales", and Simba's "sugar water bird's nest" has caused a huge public controversy. Some consumers even reported that some anchors claimed that "once the clothes are sold, they will not be returned or exchanged, and there will be no after-sales service. Please be optimistic about placing orders" during live broadcasts on the well-known domestic short video live broadcast platform "Kuaishou", which harmed the rights and interests of consumers. From the current point of view, Kuaishou does not seem to have built a healthy and complete e-commerce ecosystem.

Management changes are also a hurdle that Kuaishou can never get around. Cheng Yixiao team created gif Kuaishou, and Su Hua team used algorithms to transform it into a short video community. For a long time, Kuaishou has been a "dual-core driver" in management, and the two sides seem to be a perfect match. It was not until 2020 that Zhu Lantian, the former No. 50 employee of Kuaishou, made the subtle relationship between Su Hua and Cheng Yixiao public in an article "Talk About Our Company's Disease" on Kuaishou's intranet.

In this year, Kuaishou has undergone the biggest organizational change since its establishment. Yan Qiang, the former head of commercialization, and Ma Hongbin, the former head of operations, switched positions, and Wang Jianwei, one of the original product leaders, became the top product person in charge. Subsequently, in July 2021, Kuaishou carried out a new round of personnel structure adjustments. The growth department responsible for Kuaishou Senior Vice President Yan Qiang was canceled and split, and the overall growth business was placed under the responsibility of Wang Jianwei. Regarding the cancellation and split of the Growth Department, many people in the industry analyzed that this move meant that Yan Qiang would lose his power. It is reported that the decision to divest this business was personally made by Cheng Yixiao, the founder of Kuaishou.

Yan Qiang is interpreted by the outside world as a "Suhua family". This interpretation is not unreasonable based on the data.Previously, Su Hua and Zhang Dong co-founded One Box Tech, and Yan Qiang was the intern Su Hua personally interviewed and introduced. Later, Wanbocosi was fully acquired by Alibaba, so Yan Qiang and Zhang Dong joined Alibaba in 2013, while Su Hua chose to join Kuaishou to continue their business. In 2016, Yan Qiang joined Kuaishou. Shortly after he was deprived of power, Yan Qiang issued an email to all employees announcing his resignation.

Subsequently (October 30, 2021), Kuaishou issued an announcement that Su Hua would no longer serve as Kuaishou CEO and would continue to serve as chairman. The CEO's replacement is Cheng Yixiao, who will continue to report to Su Hua. This Kuaishou "Palace Fighting Drama" finally came to an end.

In the two and a half years since Cheng Yixiao came to power, Kuaishou seems to have become more diversified, including live streaming, e-commerce, short plays, games... which one is the future of Kuaishou? There is no answer yet, but Kuaishou may have no soul.