TikTok competitor Kuaishou lost $ 1 billion in six months
Rumors have been circulating for months that ByteDance met TikTok and Douyin goes public separately. According to Bloomberg, ByteDance is looking for a $ 2 billion pre-IPO round, which equates to a corporate valuation of a whopping $ 180 billion.
IPO
Chinese rival Kuaishou has now applied for an IPO in Hong Kong. The prospectus is interesting reading, if only to see the astronomical growth (and costs!) Expressed in figures.
Launched in 2011 by a former Google engineer to share GIFs, Kuaishou has become the nemesis of Douyin, TikTok’s Chinese sister. With 21.5% owned by Tencent, the company reported a net loss of $ 1 billion in the first six months of 2020. In the same period last year, profits were still made: approximately $ 166 million.
Kuaishou Express
The loss is partly due to the aggressive promotion for the “lite” version called Kuaishou Express. That product is tailored to the less tech-savvy user. Unlike ByteDance, Kuaishou has virtually no adoption abroad and relies on domestic growth.
Sales and marketing costs skyrocketed by 354.1% to about $ 2 billion, and that seems to be paying off: the lite app gained 100 million daily active users within a year. The Kuaishou app itself reached 302 million daily users as of June, who spent more than 85 minutes per day on the app.
Live streaming
Kuaishou earns the most from live streaming, about 69% of the revenue, with the audience donating virtual items to the live streamers. About 28% of revenue is generated by advertising.
Douyin, on the other hand, got about 67% of his revenue from advertising last year, versus 17% from live streaming.
In terms of revenue, Kuaishou generated $ 5.9 billion last year, about a third of what ByteDance made last year. ByteDance does have another cash cow: the news aggregator Jinri Toutiao.