Recently, short-video platform Kuaishou added a new feature called ‘Blind Date Corner’. As the name implies, it’s a livestream with an angle on matchmaking, where viewers can check out the other interested parties.
“It seems that Kuaishou has captured the essence of ‘blind date corners’ in parks and brought it online. How it works is that the hosts of the livestreams are the ‘matchmakers’. And viewers can join the livestream by buying virtual gifts to incentivise the matchmakers,” explains E-Commerce Toutiao. “Kuaishou acts as another intermediary, taking a cut from every transaction in virtual gifts.”
It’s not only matchmaking that’s new. The platform has also launched a dedicated channel for recruitment called Kuaizhaogong. And it has also made impressive headway in other livestreaming formats that help their users to buy and sell apartments.
The company first started dabbling in the property brokerage business in 2019, launching a dedicated channel called Kuaishou Ideal Home for real estate marketing.
As of this week, Kuaishou has listings from over 50 cities around the country and the platform is becoming an influential player in online property sales. In the first half of 2021, Kuaishou Ideal Home raked in Rmb285 million ($40 million) in transactions. During the Labour Day holiday, nearly 40 new homes changed hands through the platform, resulting in sales of Rmb35 million.
These new livestreaming businesses helped Kuaishou to surprise investors with stronger than expected third-quarter results last week. The short-video site, which competes with Bytedance’s Douyin, saw revenues grow 13% to Rmb23.1 billion. Its livestreaming business was one of the biggest highlights, up 16% year-on-year to Rmb8.9 billion in sales, or 39% of the total revenue.
Kuaishou’s average monthly active users also increased 9.3% to 626 million, with average daily usage up 8.6% to 129.3 minutes.
Investors were pleased to see that Kuaishou had grown its top-line sales but also been successful in trimming losses. The net loss in the latest quarter was Rmb2.7 billion, down from Rmb7.1 billion in the same period a year ago.
“What is remarkable is that as the top-line increases, Kuaishou’s cost of sales has continued to go down. That decline suggests that traffic growth is not the result of ‘burning money’ but is mainly due to an improvement in content quality and operational efficiency,” 36Kr wrote approvingly.
Kuaishou’s shares in Hong Kong jumped after the results announcement, going up almost 5% the following day (although its stock price has since come down slightly this week).
That’s not to say all the news about Kuaishou has been positive. For instance, its biggest revenue driver is online marketing services (i.e. advertising), which accounted for 50% of total revenue. It grew 6.2% to Rmb11.6 billion during the period, less than expected. The company said advertisers have been cutting their marketing budgets as the economy slows.
Others have expressed concerns about the prospects for Kuaishou’s e-commerce business, even though that segment did well in the third quarter, with a 27% increase in gross merchandise value (GMV) to Rmb222.5 billion compared with a year earlier. The number of new merchants joining the platform also increased nearly 80%.
The challenge is that a lot of the brands choosing to make sales on Kuaishou are white-label goods (i.e products with no real brand), however. Branded merchants accounted for just 12% of the sellers on its e-commerce platform. In comparison, 50% of Douyin’s merchants are named brands (Uniqlo and Adidas have started doing business on Douyin recently, but not on Kuaishou, ThePaper.cn also noted).
This is a problem as e-commerce is an important contributor to other areas of the platform’s performance, not least in generating much of the advertising spend more typical from bigger brands. “Kuaishou has a lot of white-label products… although the GMV of its e-commerce unit has grown rapidly, it has not been able to contribute too much revenue to the wider business,” ThePaper.cn concluded.
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