Whether it is the original e-commerce business of the platform or the newly launched local life business, good progress has been made in the huge flow of Kuaishou.
Editor’s note: This article is from the WeChat public account “DoNews” (ID: ilovedonews), author: Xia Tian Editor: Yang Bocheng.
On May 24, Kuaishou released the first quarter of 2021 results. The key data of Kuaishou performed well during the quarter, and the proportion of revenue from other businesses was also optimized.
The total revenue of Kuaishou this quarter reached 17 billion yuan, a year-on-year increase of 36.6%. This is due to the rapid development of online marketing services and other services (including e-commerce) in the two major business segments. The former’s revenue this quarter increased by 161.5% year-on-year to RMB 8.6 billion, and its contribution to total revenue exceeded 50% for the first time. The latter’s revenue was RMB 1.2 billion, a year-on-year increase of 589.1%.
Especially the e-commerce business, its total transaction volume increased by 219.8% year-on-year compared with the first quarter of 2021, reaching RMB 118.6 billion, which greatly promoted the growth of other service revenues.
In addition, Kuaishou’s gross profit margin has also increased from 34.2% in the same period in 2020 to 41.1% in the first quarter of 2021.
In addition to the business that has been carried out so far, Kuaishou is constantly looking for new development opportunities. Among them, local life will be the focus of future development.
Key financial indicators on the user side also performed well, achieving unexpected growth. Among them, the average daily active users of Kuaishou China’s apps and mini programs reached 379.2 million, a year-on-year increase of 26.4% and a month-on-month increase of 20.0%. On the Kuaishou app, the average daily usage time of each daily active user was 99.3 minutes, a year-on-year increase of 16.5%, and an increase of 10.5% from the 89.9 minutes announced in the fourth quarter of last year.
Trust that the e-commerce model has huge room for development
E-commerce has always been the core business of Kuaishou. Since its deployment in this field in 2018, platform GMV has experienced explosive growth. In 2018, Kuaishou e-commerce GMV was less than 100 million. In just one year, this figure increased to 59.6 billion, and in 2020 it soared to 381.2 billion.
In the first quarter of this year, the year-on-year growth rate of this business was also very staggering, reaching 219.8%, and the overall GMV was 118.6 billion yuan.
This is due to the long-term KuaishouFocus on content, based on a trusted e-commerce model. Since the launch of live streaming, Kuaishou has been encouraging merchants to produce more high-quality content and tap their own personalities to create their own private domain traffic. The trust deposited in private domains naturally promotes buyers and trusted merchants to conduct more transactions.
Under this model, Kuaishou is able to raise the ceiling of e-commerce business even higher. This is because users are very dependent on the anchor, and they will pay attention to any content released by the anchor for a long time, and it is easier to be “grassed” by the anchor.
According to the financial report, compared with the same period last year, in the first quarter of 2021, of the average daily usage time of each daily active user on the Kuaishou app, a larger proportion was invested in e-commerce live broadcasts. In the first quarter of 2021, the contribution of private domains to the total amount of e-commerce transactions far exceeds that of public domains.
Currently, Kuaishou is still cultivating and supporting mid-waist anchors. When these anchors establish their own private domain traffic, Kuaishou’s e-commerce GMV will be further improved, and its e-commerce business potential is worthy of attention.
In addition to users, Kuaishou also has certain advantages in attracting businesses.
Data shows that in 2020, the average monthly MAU for the entire network is 1.155 billion. The low increase means that the competition for the entire mobile Internet public domain traffic has entered the era of stock, which has caused the customer acquisition cost of merchants to continue to rise. Under Kuaishou’s private domain traffic mechanism, after acquiring customers through live broadcast, merchants can continue to interact with users to precipitate the traffic, so that subsequent second and third customer acquisitions no longer need to pay additional advertising fees. Customer acquisition costs are very low.
This will encourage more businesses to enter the fast-hand platform, enrich the fast-hand category, and then improve the e-commerce ecosystem.
As for the next development direction of the e-commerce business, Su Hua disclosed in March this year that the business focus of the e-commerce sector is to enrich tools, platform governance, quality control, continuous construction of the business ecosystem, category expansion and other basic tasks.
Enrich vertical content and increase user growth
In the era when those who get traffic have the world, Kuaishou’s user growth and user activity have always been the focus of attention from the outside world, and Kuaishou has continued to enrich its platform content for this reason.
In order to attract more users, Kuaishou has been continuously improving content with its own traffic such as sports and games in the past two years.
From 2019 to 2020, Kuaishou successively won the live broadcast rights of the League of Legends Global Finals (S9) and the “PUBG Mobile” Chinese Masters and the Professional Tournament of Glory of Kings. According to reports, during the “League of Legends” S9 global finals, Kuaishou, as a partner of S9, will broadcast the whole process. During the game, the total number of live broadcasts of Kuaishou was as high as 72 million. In addition, tens of thousands of videos were posted on the fast-hand hashtag of #S9为中国战队加油#, with 34.27 million views of the tag and more than 1.06 million likes.
Except for the game collar
In addition, Kuaishou has also made some progress in the international market: South America, Southeast Asia, etc. are the core targets to enter, and breakthroughs have been made in different overseas products such as Kwai and SnackVideo. Data shows that the average monthly active users in overseas markets in the first quarter of Kuaishou exceeded 100 million. In April this year, MAU (monthly active users) in overseas markets further increased to more than 150 million.
In view of the current performance of Kuaishou, the capital market has also given a good assessment.
Previously, many brokerages, including Bank of America, Daiwa, CICC, Ping An, etc., gave Kuaishou a “buy” or “outperform” rating, and the target price was mostly in the range of 300 to 350 Hong Kong dollars. Bank of America said that Kuaishou’s future business development will be diversified and its liquidity capabilities can be improved. CICC commented that Kuaishou continues to improve its core competitiveness in the ecosystem, and there is still room for growth in user scale. The network effect behind the community will become the core competition barrier for Kuaishou, and it is also expected to continue to incubate new monetization models based on the different needs of users in the community.