This article is from the WeChat public account “投 中 网” (ID: China-Venture) , text: Wan Ye, source: Commercial Depth of China Investment Network.
In 2019, the situation of the short video track is gradually clear, entering a situation where the vibrato and the fast hand are competing.
Both companies want to be number one in the industry, but being number one is no easy task. The mobile Internet dividend has peaked, and super platforms are facing the dilemma of traffic growth. Under these circumstances, the two short video giants, Douyin and Kuaishou, inevitably fall into a situation of offense and defense, and the competition is escalated.
If you don’t make progress, it means going backwards, and each step is crucial to the overall success. In July 2019, Douyin announced that DAU has exceeded 320 million. In order to catch up, the fast hand set a goal of 300 million DAU internally. Currently, the number of fast hands is about 200 million. And in June 2019, Douyin and Quick Hand coincident users have reached 160 million. In order to expand the territory, Douyin and Kuaishou launched the speed edition in August 2019, and are also going overseas with great intensity.
The two sides have “conflicted” in more areas. In terms of commercialization, starting in 2019, Suhua’s mouth has always been a “Buddhist department” fast hand announced to enter the commercialization, grabbing Douyin’s advertising market share; in content, fast hands to explore more categories, such as the new game live broadcast field, in Tencent’s “Blessing” directly against Douyin.
The upcoming Spring Festival will be their last battlefield in the Lunar New Year. Recently, Kuaishou announced that it has reached an exclusive cooperation with the Spring Festival Gala. It is said that it plans to invest 4 billion yuan in the Spring Festival. The Spring Festival Gala red envelope was once regarded as an important channel to promote new life. In order to promote new life, Douyin also resumed live-answering in high profile. “Top Hero” was launched on December 14.
2020 may be the year in which the short video industry pattern is fixed, and it is also the key year for the two major industry leaders, Douyin Quick Winners.
Commercial Showdown
The cyclical capital winter and the approaching of the listing threshold make “monetization” a top priority for Douyin and Hurry. Advertising, live broadcast rewards, e-commerce delivery, and games are their main areas of strength. According to QuestMobile data, Douyin’s 2019 revenue (including revenue from advertising, live broadcast rewards, e-commerce with goods, etc.) is targeted at 50 billion yuan, and the fast hand is 35 billion yuan. In 2018, the two companies’ revenues were flat, both at 20 billion yuan.
In terms of commercialization of advertisements, in the industry’s previous recognition, Douyin was more aggressive, and fast players were relatively stable. An analyst of the short video industry analyzed China Investment Network: “Dou Yin already has a relatively mature set of commercialization strategies, and the quick starters are still imitating learning.”
In fact, in the past year, products such as product promotion and topic tags that have been on the line can find corresponding products on Douyin. For example, in July 2018, Douyin launched the Star Chart platform to provide content trading services for brand owners, MCN companies and talents. In addition, the free e-commerce platform has been opened to rest assured purchases and e-commerce applets. In July 2019, Kuaishou launched a similar transaction matching product “Super Quick Order”.
Because of the differences in product attributes between the two companies ’revenue structures before, the conflict between the two companies is still in a buffer zone. Douyin, which has stronger media attributes, mainly derives from advertising information flow, while fast players mainly rely on live broadcast rewards because of a better community atmosphere.
But now that the fast-track commercialization process has begun, it means that it has started to grab market share with Douyin. For this reason, the quick hand does not hesitate to dig corners. According to “Finance” magazine, the original person in charge of Weibo e-commerce has joined Kuaishou to take charge of e-commerce business.
2019 can be regarded as the first year of commercialization of the fast hand, vibrato matchup. The founder of fast-hand Su Hua said in an internal letter released in June that the company wants to start a combat mode. Therefore, changing the “slow company” style, and has always been a cautious restraint in advertising, to achieve 15 billion advertising revenue throughout the year. In this regard, Yan Qiang, vice president of Kuaishou Commercialization, said that there is not much pressure to complete the 15 billion revenue target this year, and there is still the possibility of breakthrough.
The official data of Kuaishou shows that in the past year, the number of Kuaishou active merchants has exceeded 600,000, and the single video revenue has reached 11,000, which is a 10-fold increase over 2018. The size of Kuaishou’s commercial traffic increased by 600%, and the number of Kuaishou’s advertising customers exceeded 1,000, and the number of agents exceeded 100.
Although the fast offensive effect is obvious, this is bound to be a difficult battle. Because the total amount of advertising is limited, the two sides compete for the stock market. And this market prospect may not be optimistic. According to the report of CTR Media “Chinese Advertising Market Review in the First Three Quarters of 2019”, the Chinese advertising market in the first three quarters of 2019 has declined by 8.0% overall.
Globalization Campaign
Globalization is another fortress that Quick Hand and Douyin will take. Domestic traffic is almost divided up, and overseas is a vast incremental market. Going to sea becomes the only way for these super platforms to become more powerful.
Today, the overseas version of “DikTok”-“TikTok” has become famous overseas, even threatening the global social giant Facebook. An audio material exposed by foreign media shows that Zuckerberg has begun to prevent the rapid development of TikTok, and Facebook-owned Lasso (app similar to TikTok) will preferentially choose to enter areas where TikTok has not yet risen.
Gong Ziyu, a founding member of Douyin, revealed in a public share in December 2019 that TikTok has entered 150 countries and regions. TikTok plus Douyin has 800 million monthly active users and 300 million overseas users.
In contrast, fast-handed sailing has been slower. Although in the beginning of 2017, Quick Hands set up an overseas team and achieved initial results in the Russian and Korean markets. At that time, there were media reports that in the second quarter of 2017, the fast-growing overseas product “Kwai” ranked second in the Russian APP market, with an increase of nearly 58%.
But victory was short-lived, and Kwai has been flat since then. At the end of 2018, Kwai’s data growth had stagnated, the team made large-scale adjustments, and Liu Xinhua, the head of overseas business, also resigned during the same period. However, the fast hand did not intend to give up. According to the interface report in September 2019, Quickstart restarted overseas business and began to recruit a large number of overseas staff. This time the battle was in Brazil, which was not yet occupied by Douyin. In the reporting month, Kwai ’s DAU in Brazil exceeded 3 million.
Although the time for Douyin to go to sea is early 2017, from the results, Douyin seems to be more successful. According to Moteng Venture Capital, the Southeast Asian market is dominated by Douyin, which ranks first in Indonesia, Thailand, Malaysia, Singapore, and Cambodia. The fast hand is even better in Vietnam and the Philippines.
This may have a lot to do with the two policymakers. Zhang Yiming is more radical than Su HuaAdvance, even dare to spend a lot of money. Zhang Yiming started the global expansion with capital in 2016, and successively acquired overseas projects such as Flipagram, NewsRepublic, and musical.ly. Suhua officially mentioned the strategy of going to sea only in 2018.
A detail is that the well-known self-media Pan Pan reported that at the end of 2017, Zhang Yiming and Su Hua bid for Musical.ly (Musical.ly is a short music video community application), the angel of Musical.ly Investor Fu Sheng demanded that Musical.ly and Cheetah’s two other overseas products NewsRepublic and Live.me be bundled and transferred. Only Zhang Yiming agreed to this request. And when Musical.ly became part of the beating byte, the Douyin user data began to grow rapidly.
In addition, Douyin Global has inherited the style of byte beating and always upholding the high-to spend a lot of money to pull new and promote life, but the fast hand overemphasized the natural growth of the product at first, and was later caught off guard by TikTok Only then adjust the pace passively.
Then the battle for globalization will only get more intense. A byte-beating employee frankly said that China Douyin ’s domestic growth has stagnated, and going overseas will be an important direction.
Product Portfolio
The 2019 competition between Douyin and Faster is also focused on the product matrix.
With the intensification of competition in the industry, the single-player approach is no longer feasible, and the “matrix + ecological flow” group-style approach is the prevailing rule now. For example, Zhang Yiming “strengthened a miracle” and captured 590 million users with Douyin, Volcano and Watermelon Video. Tencent also launched 13 short video products to occupy the short video track.
The advantage of product combination boxing is that when a product falls into the bottleneck of growth, it can create new growth points in time, and the products can also support and guide each other.
A common view is that Su Hua runs products and Zhang Yiming runs the company. The reason why Kuaishou is weak may be lost in a single product.
When aware of this, the fast hand also wanted to fight back with a byte-beating method. According to incomplete statistics, since 2018, Qiaoshou has invested and incubated more than 10 APPs, covering games, content communities, tools and other fields. Including short video APP universe video, Uget, Guangyin Mulight, industrialWith APP fast movie, trendy cultural community bundi, life planting APP bean field community, game APP fast hand mini games, game live APP electric meow live broadcast, photography tool APP sweet camera and information products “quick look”.
But it doesn’t seem to work at this time. In addition to the current performance of Kueiying, QuestMobile’s data shows that from June 2018 to June 2019, the number of Kueiying users increased by 46 times. Among all video editing apps, Kueiying’s active users The digital ranks first. The remaining products performed poorly, and Universe Video and Douda Community have even stopped operating.
By contrast, Douyin ’s parent company ’s byte is beating. In addition to Douyin reaching 300 million DAU, volcano video and watermelon video have also become the application of 10 million DAU.
There is no doubt that the competition between Douyin and Qiaoshou in 2019 will continue until 2020, and may be even more anxious. An investor in the entertainment industry told CIC that there will still be a very fierce competition between the two in the future. But it is too early to predict the outcome, after all, both sides have their own advantages and disadvantages. Fast-hand users have better long-term retention than Douyin, and Douyin has a stronger ability to acquire users.