Analysis report on short video competitors such as Kuaishou and Douyin!

This article conducts a multi-dimensional analysis and comparison of these three products to understand their inherent product logic and how different logics shape different products. Summarize the development strategies of the three products, refine reusable methodologies, and also gain in-depth understanding of the future development direction and competitive situation of the short video industry.

Report writing time: 2020.5.10 – 2020.5.23

Report written by: carman

Product experience environment: Android 9

Product Version:

Version Information

1. Purpose and main contents of the report

1.1 Purpose of the Report

In order to make the report content more focused, the research purpose of the report should be clearly defined before writing any report.

As a competitive product analysis report on the short video industry, this report selects two leading products in the industry - Douyin and Kuaishou as comparative competitors. The purpose is to analyze how Douyin has made rapid progress in just four years, surpassing Kuaishou in terms of user scale and profitability, given that Kuaishou started early and has accumulated a large number of users (Kuaishou's DAU exceeded 100 million 6 years after its establishment, while Douyin only took 17 months. In June 2018, Douyin surpassed Kuaishou with 150 million daily active users).

By clarifying this issue, we will have a better grasp of the development context of the overall short video industry and the principles of product design. At the same time, ByteDance upgraded the brand of its Volcano Video in January 2020 and renamed it "Douyin Volcano Edition", which is an important step for ByteDance to build a short video product matrix with "Douyin" as the core.

Compared with TikTok, TikTok Volcano Edition is closer to Kuaishou in terms of user groups and product design. Therefore, it is also included in the research scope to analyze the value significance behind this strategy.

By conducting a multi-dimensional analysis and comparison of these three products, we can understand their inherent product logic and how different logics shape different products. Summarize the development strategies of the three products and extract reusable methodology. At the same time, we can also gain an in-depth understanding of the future development direction and competitive situation of the short video industry.

1.2 Main contents of the report

This report is mainly divided into 5 parts:

• The first part briefly outlines the research purpose and main contents of this report.
• The second part is used to introduce the development status of the short video industry and the reasons for choosing these three competing products.
• The third part is the focus of this report, which is the multi-dimensional comparison between the three products. The report analyzes the differences between the products and the consequences of these differences from four levels: strategy, product function structure, performance and interaction, and content distribution layer.
• The fourth part compares the business models of Douyin and Kuaishou.
• The fifth part is the summary of the report, which summarizes the research conclusions and reflects on the future development direction of short videos.

2. Overview of the short video industry and selection of competitive products

With the continuous development of Internet information technology and the increasing popularity of mobile smart terminals, China has entered a veritable mobile Internet era. According to the 45th "Statistical Report on the Development of China's Internet" released by the China Internet Network Information Center, the number of mobile Internet users in China has reached 897 million, accounting for 99.3% of the total number of Internet users.

In the era of mobile Internet, people's media contact habits and content consumption demands have undergone tremendous changes, and mobile short videos have come into being. Short videos have the characteristics of short playback time, low shooting threshold, fast transmission speed, and both entertainment and sociality. They are deeply in line with the current fragmented usage scenarios of users and have become one of the most commonly used applications in people's daily lives.

There are multiple reasons behind the rapid development of the short video industry. In addition to the popularization of smart devices and the technical support of communication technology development, capital support and the rapid development of MCN organizations in recent years are also important influencing factors. The following report mainly gives a brief description of the short video industry from three aspects: development timeline, industry scale and industry structure.

2.1 Development Timeline Overview

According to key time nodes, the development of China's mobile short video industry can be divided into four stages, namely the embryonic stage, growth stage, explosive stage and formative stage, as shown below:

1) Embryonic stage (2011-2013): During this stage, domestic short video platforms were built from scratch, and early products such as Kuaishou and Miaopai were launched.

2) Growth stage (2014-2015): This stage is the mid-term of domestic 4G construction, and it is gradually entering the mobile Internet era. Many short video products imitating foreign products have emerged.

3) Explosive period (2016-2017): 2016 was the year with the highest smartphone shipments in China. 4G construction was initially completed, and the Internet population dividend still existed. Major Internet giants entered the market one after another, and a large number of short videos including A.me, the predecessor of Douyin, were launched, sparking fierce competition.

4) Formation period (2018-present): With the industry's great evolution, the short video industry has initially stabilized. A market structure of "two supers and many strongs" has been formed, with Douyin and Kuaishou becoming the two giants. At the same time, Baidu's Haokan Video and Quanmin Video, and Tencent's Weishi have also occupied a certain market share. The overall short video industry is becoming increasingly mature and commercialization is accelerating. In addition to mobile short video apps, short videos have been accepted by other products as a form of content carrier. Whether it is e-commerce, music, community, browser or other content-containing products, short videos have been incorporated into the product modules.

Figure 2.1 Development of the short video industry

2.2 Overall scale of the industry

1) User scale

In terms of user scale, according to the 45th "Statistical Report on the Development of China's Internet" released by the China Internet Network Information Center, as of March 2020, the scale of short video users in China was 773 million, an increase of 125 million from the end of 2018, accounting for 85.6% of the total netizens. In terms of absolute numbers, the penetration rate of short videos among netizens has reached a very high level.

Figure 2.2 Short video user scale and usage rate from June 2018 to March 2020

Figure 2.3 Short video user scale and growth rate from 2013 to 2020

According to the short video user scale and growth rate data from 2013 to 2020 released by Founder Securities, the specific data on user scale deviates from the data released by CNNIC, but the growth rate trend should be relatively consistent. In terms of growth rate, the scale of short video users has grown rapidly since 2014. The growth rate declined in 2017, but remained above 50%, especially in 2018 when the annual growth rate reached its peak (107.0%). After 18 years, the growth rate of user scale began to decline sharply, and the estimated growth rate in 2020 is only 15.2%. It can be foreseen that as the demographic dividend gradually disappears, the overall user scale of the short video industry has stabilized, and there will be basically no explosive growth, gradually transitioning from an incremental market to a stock market.

2) Duration of use

From a horizontal comparison of the usage time of various apps, the time users spend using short video products also ranks among the top. According to data from the China Internet Network Information Center, the average weekly online time for Chinese netizens is 30.8 hours. Among the commonly used apps, instant messaging apps are used the longest, accounting for 14.8%.

The usage time of short videos accounted for 11.0%, an increase of 2.8 percentage points year-on-year, ranking third. It ranks first in the pan-entertainment industry. Users' online time is limited, and various products are often in a competitive state of "one rises while the other falls". The immersive product experience of short videos gives it a greater advantage in competing for user time.

Figure 2.4 Average monthly usage time per person in the pan-entertainment industry

Figure 2.5 Comparison of the growth rate of time spent on some entertainment methods by Chinese users from 2017 to 2019

3) Market size

Because of its huge user base and traffic, the market size of the short video industry has also been rising. According to data released by Founder Securities, the market size of China's short video industry reached 100.65 billion yuan in 2019, and is expected to exceed 150 billion yuan in 2020 and exceed 200 billion yuan in 2021. The main sources of income for the short video industry include advertising revenue, paid revenue, and e-commerce revenue, among which advertising revenue is the most important source of income, accounting for 61.1% of the overall income structure.

Figure 2.6 Market size of China's short video industry

4) Industry structure

As of May 2020, after fierce market competition and the industry's great waves of elimination, the short video industry has formed a relatively stable pattern. Douyin and Kuaishou have become the two giants of the industry. Douyin's daily active users exceed 400 million, far ahead of the rest, and Kuaishou's daily active users have also exceeded 300 million.

In addition to Douyin and Kuaishou, major Internet giants have launched a number of short video apps, built their own short video matrix and challenged the leading Douyin and Kuaishou, but the effect is not obvious. Various short video products that are deeply rooted in vertical fields are still relatively small in terms of user scale. The competition between Kuaishou and Douyin is becoming increasingly fierce, but it is expected that the industry will not undergo major changes in the short term.

Table 2.1 Monthly ranking of independent device applications in the short video industry

Figure 2.7 Short video matrix of major Internet companies

Figure 2.8 Trends in monthly active users of typical apps in the short video industry from 2017 to 2020

5) Industry chain

Understanding the industry chain is crucial to understanding an industry. The industry chain reveals the flow direction of key elements such as capital, manpower, raw materials, profits, etc. within the industry and the participants in the upstream and downstream of the industry. The short video industry chain generally consists of five parts, including content producers, various short video platforms, advertising brand owners, users and regulatory authorities. The specific industry chain is shown in the figure below:

Figure 2.9 Short video industry chain

2.3 Overall portrait of industry users

This report constructs an overall portrait of users in the short video industry based on data from a third-party database. The overall user portrait of the industry can be used as a reference system. It can be compared with the user portrait of a specific product when analyzing it to determine whether this specific short video product has more obvious "younger" and "downward" characteristics compared to the industry average.

The following user data comes from the Questmobile database:

1) Gender ratio: Women account for 54% and men account for 46%. Overall, there are slightly more female users than male users.

Figure 2.10 Gender distribution of short video users

2) Educational background ratio: 80.5% of users have a high school education or below, and only 10.4% of users have a bachelor's degree or above, which is consistent with the educational level of the overall Chinese Internet users.

Figure 2.11 Educational background distribution of short video users

3) Region: From a geographical perspective, the largest number of users are located in third-tier cities, reaching 22.4%. However, the proportion of users in first- and second-tier cities also reached 49.2%.

Figure 2.12 Geographical distribution of short video users

4) Age: In terms of age, short video app users are clearly getting younger, with 79.8% of users under the age of 35 and users over 40 accounting for only 6.0%. This also indirectly suggests that future growth potential is concentrated in the middle-aged and elderly groups.

Figure 2.13 Geographical distribution of short video users

5) From the perspective of user needs: According to a questionnaire survey conducted by 36Kr, the main demand of users for using short video platforms is to browse interesting video content and meet their own entertainment needs. In addition, other common needs include learning knowledge and skills and sharing life.

Figure 2.14 Distribution of reasons for short video users

Specifically for the three different products, the user usage driving types are divided into content-driven, social-driven and money-driven. Among them, the proportion of content-driven and social-driven users is not much different, while the proportion of money-driven users of Douyin Volcano Edition is significantly higher than that of Douyin and Kuaishou (more than 10 percentage points).

Figure 2.15 Distribution of driving types of short video usage

2.4 Competitive Product Selection

This competitive product analysis report selects three products, Douyin, Kuaishou and Douyin Volcano Edition, for comparison. Douyin and Kuaishou are the two giants in the short video industry, and are also two products that cannot be avoided to gain a deep understanding of the Chinese short video industry. The core goal of this report is also to analyze how Douyin quickly surpassed Kuaishou in a short period of time.

In addition, the product logic of Douyin Volcano Edition (formerly Volcano Short Video) and Kuaishou are similar, and ByteDance's inclusion of it in Douyin's product matrix is ​​also an important signal to target Kuaishou. In the future, the two may gradually merge in content, so it is also included in the comparison scope. The following is a brief introduction to these three products.

1) Tik Tok

Douyin was launched in September 2016 and was originally a community platform focusing on short music videos for young people. Users can use this software to select songs and shoot short music videos. Douyin has powerful KOL and celebrity resources, and attaches great importance to product operations. Its user growth rate is astonishing. In June 2018, Douyin announced that its daily active users exceeded 150 million. In January 2020, Douyin announced that its daily active users exceeded 400 million and its monthly active users exceeded 500 million. At this time, it was less than 4 years since the product was launched.

Figure 2.16 Trends in daily and monthly active users of Douyin

2) Kuaishou

Kuaishou started much earlier than Douyin. Its predecessor was "GIF Kuaishou", which was launched in March 2011. It was originally an application for making and sharing GIF images. In November 2012, Kuaishou transformed from a pure tool application into a short video community, serving as a platform for users to record and share their production and life. In November 2017, the number of daily active users of Kuaishou APP exceeded 100 million, the total number of registered users exceeded 700 million, and more than 10 million new video contents were generated every day. As of May 29, 2019, Kuaishou’s daily active users exceeded 200 million.

Kuaishou has consistently adhered to the "Buddhist" principle of natural growth. However, with the rise of Douyin, the pressure on Kuaishou has gradually increased, and it has begun to focus on operations and accelerate commercialization. As of March 2020, Kuaishou's daily active users exceeded 300 million, and monthly active users were close to 500 million.

Figure 2.17 Kuaishou development timeline

Figure 2.18 Trends in monthly active users on Kuaishou

3) Douyin Volcano Version (formerly Volcano Short Video)

The predecessor of Douyin Volcano Edition was "Volcano Short Video", which was incubated and launched by ByteDance in April 2016. Volcano Short Video is a 15s original life short video community where users can obtain content, show themselves, gain fans and find like-minded people through short videos. Huoshan Video is a product that ByteDance uses to compete with Kuaishou. Its mainstream users are users in third- and fourth-tier cities and rural towns, which are highly consistent with some of Kuaishou's core users. Huoshan Video, which focuses on the sinking market, even held its press conference in a rural area. As of June 2019, Huoshan Video had more than 43 million daily active users and more than 110 million monthly active users. On January 8, 2020, Volcano Video and Douyin officially announced their brand integration and upgrade. Volcano Video was renamed Douyin Volcano Edition, and a new icon was launched.

3. Comparison of competing products

3.1 Strategic Level Analysis

3.1.1 Product Positioning

1) Intuitive comparison of product sologan

Table 3.1 Product sologan comparison

The product slogan can directly reflect the core positioning of the product. Let's analyze them one by one below.

Tik Tok’s original slogan was “Let worship start here”, and the product mainly focused on those creative, talented, and high-quality video producers. These high-quality videos were the mainstream content of Tik Tok in its early days, and the creators were the objects of worship. Douyin’s initial user group was young people from first- and second-tier cities, which was also the source of Douyin’s initial “cool and trendy” brand tone.

Later, as the user scale expanded and the group went down, in addition to creative music and dance short videos, more diverse content was needed. At the same time, in order to encourage more users to participate in content creation, Douyin changed its slogan to "Record a Beautiful Life". The product gradually transitioned from a creative music short video community to an original short video distribution platform with diverse content.

Kuaishou’s slogan is “Record the world, record you”, combined with the text on Kuaishou’s opening screen “See every kind of life on Kuaishou”, Kuaishou’s product positioning is more inclusive, encouraging everyone to use Kuaishou to record and display their lives. This is also the original vision of Kuaishou’s founders Su Hua and Cheng Yixiao. Records and recorders have always been placed at the top of the platform, and the decentralized distribution model gives everyone equal exposure opportunities.

Therefore, Kuaishou gained the favor of users in fourth- and fifth-tier cities and rural areas in its early days. At the same time, due to the generalization of users, the quality of content varied greatly, and it was labeled as "rustic and vulgar." However, in recent years, through a series of operations and iterations, Kuaishou's products have gradually undergone brand upgrades, and more and more users in first- and second-tier cities and with high education levels have begun to use Kuaishou.

The predecessor of Douyin Volcano Edition was Volcano Short Video. Its original slogan was "Short videos that can make money". It used monetary incentives to attract low-end users. Monetary incentives have a simple and direct effect on attracting low-end users. Pinduoduo and Qutoutiao, which are targeting the low-end market, have also acquired a large number of users by using this method. However, monetary incentives are often unsustainable. Later, Huoshan Video changed its slogan to "Love life at Huoshan", emphasizing the life-like nature of the platform's content.

At present, the slogan of Douyin Volcano Edition is "More friends, bigger world", which also directly points out the importance of Douyin Volcano Edition to the construction of social attributes of the product. Users can see a bigger world and make more friends by browsing and creating short videos on the platform. Short video social networking has always been the direction that major short video products have focused on exploring. Social networking can enhance user stickiness and improve the efficiency of content distribution through social links.

Compared with the strong social attributes of Kuaishou users' "old iron culture", Douyin users' social stickiness is relatively insufficient. Douyin Volcano Edition will play a certain compensatory role in social aspects.

In general, Douyin is more centralized, with most of the content on the platform being fragments of “good life”. Most users are content consumers, and a small number of top users are the core content source of Douyin. Kuaishou is more inclusive. Everyone can record themselves, follow their favorite users, and see diverse lives. Therefore, strong social interaction relationships are often formed between users.

This is why we often say "scrolling Douyin" and "playing Kuaishou". "Scrolling" reflects more of the user's browsing behavior, with a weaker sense of participation, while "playing" reflects that the user regards the product as an indispensable way of life, with a stronger sense of participation. The Volcano version of Douyin focuses on strengthening its social attributes in order to replicate the successful experience of Kuaishou.

2) Brand image

From the perspective of users' perception of product image, according to a report released by China Merchants Securities, Douyin's core labels are "cool and trendy", "young" and "interesting", Kuaishou's core labels are "real" and "down-to-earth", and Huoshan's core labels are "interesting and funny" and "innovative and unique", which is consistent with the results of the positioning analysis in the previous section.

Figure 3.1 How to view TikTok and Kuaishou

Figure 3.2 Brand image performance (Huoshan VS Kuaishou)

3.1.2 User Comparison

Here we analyze the user portraits of Douyin, Kuaishou, and Douyin Volcano Edition. The user portraits are mainly compared from three dimensions: gender, age, and region:

1) Tik Tok User Profile

Here we use the data released by Giant Arithmetic:

Table 3.2 Douyin user portrait

2) Kuaishou User Profile

Su Hua likened Kuaishou's user positioning to "the average person in society." He believes that the distribution of Kuaishou users in second- and third-tier cities is determined by the form of Chinese society. If we abstract all Kuaishou users as one person, he is equivalent to an "average person in society". Only 7% of China's population lives in first-tier cities, and 93% lives in second- and third-tier cities, so the "average person in society" falls in second- and third-tier cities.

Table 3.3 Kuaishou User Portrait

3) User portrait of Huoshan Video

Table 3.4 User portrait of Huoshan short video

In terms of gender, the male-female ratio of the three products is relatively balanced, with slightly more males than females.

In terms of the geographical location of users, 44% of Douyin users are in first- and second-tier cities, and 56% of users are in third-tier and lower cities. 35% of Kuaishou’s users are in first- and second-tier cities, and 65% of its users are in third-tier and lower cities. 39.8% of the users of Douyin Volcano Edition are in first- and second-tier cities, and 60.2% of the users are in third-tier and lower cities.

It seems that Kuaishou is still the most low-end product, which is inconsistent with my inherent impression (I think Douyin Volcano Edition should be the most low-end), but it may also be because Kuaishou’s user base is too large.

In terms of age, 69.4% of Douyin users are under 35 years old, with the largest group being 25-30 years old. 70% of Kuaishou users are under 30 years old, and 66% of Huoshan Video users are under 35 years old, with the largest group being 31-35 years old. Relatively speaking, Kuaishou is younger, which is inconsistent with the inherent impression. For any product, young users under the age of 35 are the mainstream user group.

3.2 Structural layer analysis

This section breaks down the functional structure of the three products. By analyzing the structural modules, we can clarify the logic of product design and key functional modules.

3.2.1 Product Function Structure Diagram

1) Douyin’s product function structure diagram

Douyin's product functions can be roughly divided into five modules: Home Page (Follow + Recommendation + Live Broadcast Tab), Same City, Shooting (Photos + Short Videos + Live Broadcast), Messages (Interactive Function), and My (Profile + More Functions).

Figure 3.3 Douyin's product function structure diagram

2) Kuaishou’s product function structure diagram

Kuaishou's product functions can be divided into three modules, namely homepage (discover, follow, local), shooting and more. The product function structure diagram is as follows:

Figure 3.4 Kuaishou’s product function structure diagram

3) Functional structure diagram of Douyin Volcano version

The product functions of Douyin Volcano Edition can also be divided into three modules, namely Homepage (Video, Follow, Same Zone, Live), Shooting and My. The product function structure diagram is as follows:

Figure 3.5 Functional structure diagram of Douyin Volcano version

3.2.2 Product Function Structure Comparison

First of all, the functional structures of these three products are generally similar, and the functional modules of Douyin Volcano Edition and Kuaishou are basically the same. It can be said that the basic functional modules of the current short video apps are: browsing (short videos and live broadcasts), shooting, social interaction, and my four basic functions. At the same time, different products will add e-commerce, games and other functional modules according to their own strategies.

Here is a comparison of the core functions of the three products:

1) Home page

Figure 3.6 Home page of three products

Judging from the homepage, short videos will start playing automatically after entering Douyin, while Kuaishou and Douyin Volcano Edition use a double-column waterfall flow format. After entering the product, a double-column video cover will be displayed, and users can freely choose to watch short videos.

The advantage of Tik Tok's single-column mode is its strong sense of immersion and relatively simple user operation, but the single-column mode has high requirements on the quality of content and the accuracy of algorithm recommendations. It is conceivable that when users are not interested in the content of several videos in a row, they will easily leave the product, and this is the unique advantage of Douyin. The advantage of the double-column waterfall flow is that it can display more content. The content quality of Kuaishou and Douyin Volcano Edition is relatively inferior to Douyin. This also gives users the right to choose freely, but it will also cause users to operate frequently and use it for a short time.

In the layout of the homepage, Douyin places the tab at the bottom of the screen, while Kuaishou and Douyin Volcano Edition are placed at the top of the screen. What is relatively consistent is that both have options of following and same city. Douyin will display the number of newly released videos of the followed users on the following tab, while Kuaishou and Douyin Volcano Edition use a small red dot guidance method.

Personally, I prefer the former method, as this feeling, similar to "unread messages", is more likely to attract users to click. In the design about the same city, Douyin displays the name of the city where the user is located, the Douyin Volcano version is accurate to the district and county level, and Kuaishou just uses the word "same city".

Both Douyin and Douyin Volcano version provide live broadcast entrances on the homepage, indicating that they attach great importance to live broadcasting. However, Kuaishou does not have a live broadcast entrance (it places the live broadcast entrance in the sidebar), which extends the user's usage path. It is recommended to add a live broadcast entrance on the homepage.

As for the search function, searching is an active behavior of users and plays an important role in collecting users' interests. Douyin and Kuaishou both provide search box entrances on their homepages, and the Douyin Volcano version places the search in more columns.

All three products provide a shooting entrance on the homepage, encouraging users to create and upload videos.

2) Same city

The same city function provides corresponding short videos based on the user's geographic location. The geographical restrictions make the video quality of the same city section uneven. Therefore, in order to increase user tolerance, all three products adopt a double-column waterfall flow presentation format, which consists of four basic elements: cover, text, distance, and avatar. Users who are broadcasting live will also have a live broadcast icon.

Figure 3.7 The same-city pages of three products

The location of TikTok and Kuaishou can be modified manually, but the location of TikTok Volcano version cannot be modified. In terms of distance, the setting of Douyin Volcano Edition is the closest to users in the same city, which can best increase users' sense of intimacy. In terms of distance design, Douyin uniformly displays “＞10km” for distances above 10km. This is also a little trick. Too far a distance may make users feel alienated. Kuaishou’s same-city distance will display specific numbers. In addition to the user’s city, it will also display other cities in the user’s province. At the same time, there is a large amount of live broadcast content (more than 50%) in the same-city content.

Judging from the video data, in fact, the data on video likes and comments in Tongcheng are very average, only a few hundred or even dozens, but Tongcheng still has certain potential for businesses such as live streaming and e-commerce sales.

3) Follow

Figure 3.8 Follow-up pages for three products

From the perspective of the follow page, after entering Douyin's follow page, a single-column full-screen short video is still automatically played, while Kuaishou and Douyin Volcano version use a double-column waterfall flow to display the short videos posted by the followed accounts.

Compared with Kuaishou, the cover of a single video on Douyin Volcano Edition is smaller, and more content can be displayed on one screen. The video at the bottom cannot be fully displayed, which will also attract users to continue scrolling down. This is similar to the design concept of Pinterest. All three products will display the release time of the videos you follow, but they are not strictly sorted by timeline.

4) Search function

Comparing the search functions of the three products, Douyin, in addition to guessing what you want to search, also provides multiple search lists, including hot list, celebrity list, live broadcast list, brand list and good product list. The search results include seven subcategories: comprehensive, video, user, music, topic, place, and product. The comprehensive search results are presented similarly to videos on Weibo, and the video search results also take the form of a double-column waterfall flow.

Figure 3.9 Douyin search interface

Kuaishou’s search section provides a hot list (similar to Weibo’s hot searches). It is worth mentioning that Kuaishou provides a large number of vertical category entrances in the search interface. Users often have clear purposes when using the search function, including interest in a certain vertical category. At the same time, Kuaishou also provides an independent entrance to epidemic events. The epidemic is a hot topic that the public is currently paying attention to and can also attract a wave of clicks.

In addition, Kuaishou also recommends some "nearby people" to users. The purpose of this is to attract user attention. One of the major goals is to increase user stickiness by strengthening social connections between users. Finally, for the search results, there are also several subcategories: comprehensive, user, live broadcast, photo album, music, work, group chat, and tags.

Table 3.10 Kuaishou search interface

Figure 3.11 Kuaishou real-time epidemic dynamics

The search function of the Douyin Volcano version requires opening the sidebar, which increases the user's operation cost. At the same time, opening the search requires a certain amount of loading time (probably because the installation package is small), which also affects the user's mood. The TikTok Volcano version does not provide popular lists, only “Guess you like” recommendations based on historical data.

It is worth noting that the search interface of Douyin Volcano Edition provides a unique "circle" entrance and a large amount of vertical content (including life encyclopedia, popular content, author popularity list, old songs, square dance and no less than dozens of categories). There are also several subcategories for search results, including comprehensive, users, videos, circles, topics, and music.

Figure 3.12 Douyin Volcano version search interface

In contrast, judging from the direction of the search interface, Douyin's list format reflects the emphasis on top content. Whether it is a hot event, a celebrity or an anchor, the short videos at the top of the list will get more exposure. Kuaishou and Douyin Volcano Edition reflect the emphasis on vertical content and social relationships among users.

5) Short videos

Figure 3.13 Douyin and Douyin Volcano version short video interface

Judging from the browsing interface of short videos, the basic elements of the three products are relatively consistent, including personal information (avatar, ID, location), video content, copy, music, and interaction (likes, comments and reposts). Compared with Douyin, Douyin Volcano Edition has added the function of sending flames, which is also the monetary incentive system that Douyin Volcano Edition focuses on building.

Figure 3.14 Kuaishou’s normal mode and large screen mode

Kuaishou's short video browsing is divided into two modes. In the default mode, the video content occupies about 3/4 of the screen, and the number of likes and comments occupies 1/4 of the screen. The interactive function is placed at the top of the screen, and the video will stop playing when you swipe up. The short video interface in large-screen mode is similar to Tik Tok. The difference is that the comments will scroll in the lower left corner of the video, which is also a design to attract users to participate in the comments.

5) Live broadcast

Regarding live streaming, after clicking the live streaming tab on the homepage of Douyin, or clicking the live streaming square option on the sidebar of Kuaishou, you can directly enter a live streaming page. After clicking the live streaming tab of Douyin Volcano Edition, users need to make a free choice, and it provides three major categories: "Recommendations", "Nearby" and "Games". The cover of a single live broadcast is larger, and the live broadcast screen will pop up to attract users to click.

Figure 3.15 Douyin Volcano version live broadcast entrance

Judging from the live broadcast page, the designs of the three platforms are relatively consistent, including anchor ID, online audience, hourly rankings, barrage, gifts, etc. However, the Douyin Volcano version will display in real time the anchor's ranking on the hourly list or how many gifts are needed to enter the hourly list, taking advantage of the fans' competitive mentality to encourage them to give gifts. Both Douyin and Kuaishou provide an entrance to "More Live Broadcasts" in the live broadcast interface, but the Douyin Volcano version does not have this entrance.

Figure 3.16 Live streaming interface of three products

6) Interaction/message module

Figure 3.17 Message modules of three products

The interactive function is one of the important functions of short video products. Douyin places the message as an independent tab at the bottom of the screen. The message page of Douyin has the following options: fans, interactive messages, Duoshan, and recommended to follow (the option of fans will also appear when you click it).

Kuaishou places the message module on the sidebar, including updates from followed users, recommendations (people you may know + people nearby) and private messaging functions. The message module of the Douyin Volcano version is relatively simple, with only interactive messages, and no recommended follow function. However, there is an option called "My Gossip" in the sidebar of Volcano. After clicking it, I found that it is to follow the user's dynamics. I don’t quite understand why it is called "My Gossip" and it is recommended to directly include it as dynamic in the message module.

Finally, the messaging modules of all three products have the ability to create group chats.

7) Shooting and uploading functions

Shooting is also one of the core functions of short video products. The user experience of shooting and uploading has an important impact on the user's creative enthusiasm. Here we break this module down into three processes: shooting, editing, and uploading.

From the shooting interface, all three products can choose from four modes: taking photos, shooting short videos, uploading pictures, and live streaming. At the same time, each product provides a large number of background music, beautification, special effects props, and video templates. The overall experience feels relatively simple and convenient.

In terms of shooting time, Douyin can choose 15s or 60s, Kuaishou can choose 11s, 57s and 5 minutes, and the Douyin Volcano version defaults to 15s. In terms of time, short videos between 15s and 1min are more suitable, while Kuaishou's 5 minutes may be based on the consideration that many users like to shoot sitcoms.

In addition, both Kuaishou and Douyin Volcano Edition have karaoke functions, but Douyin does not. At the same time, Douyin Volcano Edition also has a karaoke function entrance in the sidebar, proving that this function is more popular with users. It is worth mentioning that Douyin Volcano Edition also has a special "Chat" function, which is to talk about your own opinions on hot topics. This is also to encourage users to participate in content production and enhance user vitality.

Figure 3.18 Shooting interface of three products

From the editing interface, all three products provide basic functions such as music, special effects, text, graffiti, stickers, etc. Douyin and Kuaishou have editing functions, but Douyin Volcano does not.

Figure 3.19 Video editing interface of three products

On the video publishing interface, all three products allow you to select video cover, enter text, @friends, select topics and positioning, etc., among which cover and text are required options.

In terms of special features, Douyin can add mini-programs (mainly some mini-programs) to short videos, while Kuaishou provides some personalized settings, including whether to allow others to take photos in the same frame, whether to allow downloading, and whether to display in the same city. The Douyin Volcano version has an option to sync to circles on the publishing page, which proves its emphasis on building a content ecosystem in the circles.

Figure 3.20 Video editing interface of three products

8) E-commerce/live streaming

Selling products has become an important part of the commercialization model of short videos. Currently, there are two main types of selling products through short videos. One is to shoot a short video related to the product and add a shopping cart guide on the video page. This mainly relies on the creativity of the short video shooting. Another way is to start live broadcasts and promote products during live broadcasts. Live broadcasts are relatively more interactive and can enhance users' willingness to buy during communication.

The shopping process of short videos in Douyin is as follows: click on the shopping cart in the short video - item details and the same video page - jump to Taobao coupon/Douyin store - product details page. After the purchase is completed, you can directly click back to Douyin. As for live streaming sales, you can click on the shopping cart entrance in the live broadcast to make purchases.

Figure 3.21 Douyin product purchase process

Figure 3.22 Douyin live streaming sales

As for the store entrance settings, the entrance levels of the shopping assistant and card coupons are relatively deep, within the more functions of my module. In the shopping assistant, there are four options at the top: Order, Shopping Cart, Coupon, and Wish List. Personally, I think the shopping cart and wish list are somewhat redundant, so you can just keep one. By clicking on the product cover in the shopping assistant, you can enter the short video playback page. From the product classification, you can also see that Douyin’s key products include clothing, beauty and food.

Figure 3.23 Douyin’s coupon and shopping assistant page

The way Kuaishou enters the purchase is the same as that of Douyin, and it is also a shopping cart link that clicks on short videos or live broadcasts. The products are divided into external e-commerce and Kuaishou stores.

Figure 3.24 Kuaishou's live broadcast and short video sales

Figure 3.25 External e-commerce

At the same time, the entrance of Kuaishou Store is in the "More" functional module of the product, and the design of the personal page is consistent with Taobao. For the recommended products in Kuaishou, compared with Douyin, there are more "jade" and "department stores", which proves that these two types of products are the products that Kuaishou users buy more. In addition, a large number of products in Kuaishou stores will be diverted to live broadcasts, proving that the live broadcast is better effect.

Figure 3.26 Kuaishou store page

The Douyin Volcano version does not have an e-commerce entrance, and you can only purchase products by clicking on the link in the short video live broadcast.

Figure 3.27 TikTok Volcano Edition Shopping Process

Overall, the e-commerce entrances of Douyin and Kuaishou are both deep, and the Douyin Volcano version does not even have an e-commerce entrance. In other words, the current mainstream e-commerce form is to arouse users' purchasing intention through short videos and live broadcasts, rather than "shopping in stores". After all, e-commerce is an accompanying feature of short video products, and the content of short videos and live broadcasts is the core of the product.

9) Featured functions

This part focuses on analyzing the special functions of the three products. Through this special function of "no one and self-have", it is obvious that the differences between the products and future development directions can be seen.

The two special functions of Douyin are Douyin mini programs and creator service center, which are the construction of the platform ecosystem. Users can use various mini programs (mainly ByteDance products) on Douyin, which not only uses Douyin as a traffic entrance platform, but also helps to enhance users' usage market and stickiness. The Creator Service Center is a training service function provided by Douyin for creators. It is far from the continuous high-quality videos, and Douyin maintains its vitality in the core of development. This function reflects the importance of Douyin for creators.

Relatively speaking, Kuaishou's special features are more abundant, so please pay attention to the analysis.

Check-in function:

Figure 3.28 Kuaishou check-in interface

Kuaishou has designed the function of check-in. Kuaishou provides some simple check-in themes (such as selfies, weather, what to eat). Users can choose a certain theme to check in. They can get the reward of exposure coupons after 12 consecutive days. Check-in is an important way for products to improve users' enthusiasm for logging in daily, but Kuaishou's check-in is not just a simple click, but requires users to shoot short videos and have a high degree of participation.

Post a message:

Kuaishou also provides the function of posting talks. Talk is a lightweight sharing that is used to share users' instant life clips and moods, including text talks and video/picture talks. However, the entrance to the talk is also quite deep, located on the user's profile page, proving that it is not currently the mainstream function of the product.

Figure 3.29 Kuaishou's "speak" function

People are watching:

Kuaishou’s “Everyone is watching” is actually a distribution center for popular content. Including three submodules: hot searches, channels, and handheld TV. Hot searches are some recommended content and popular topics from Kuaishou. The channel contains some vertical content. Kuaishou's vertical content is divided very thoroughly, with a total of 56 sub-channels.

Palm TV is a edit of TV programs and is pushed according to a fixed schedule. Palm TV has fixed themes in different time periods, and is mostly channels with local characteristics, which may be highly attractive to people in specific regions. Overall, this section reflects Kuaishou's emphasis on platform content construction, especially the two parts of high-quality content and vertical content.

Figure 3.30 Kuaishou's "Everyone is watching" page

Game module:

Kuaishou regards games as an independent module, and short video users and game users already overlap, and game vertical categories are also an important part of the platform content. Kuaishou’s game module mainly includes two parts, one is advertisement for various games (mainly Tencent games), and the other is game-related live broadcasts. I personally feel that pure advertising is a bit too much, so it is recommended to reduce advertising and add a game-related short video submodule.

Figure 3.31 Kuaishou "Game" module

Yinyuetai:

Music is also the key content of short video platforms. Kuaishou not only puts music first in popular channels, but also sets the option of "Yinyuetai" in more functions. This is enough to show Kuaishou's emphasis on music content.

There are two purposes behind it:

• First of all, grassroots music is a big market. Yinyuetai has given ordinary Kuaishou users a platform to show their musical talents, and can incubate excellent musicians from it.
• Second, by implementing the original music plan, Kuaishou can also participate in the upstream of the music industry and explore the commercial potential of "short video + music".

From a design perspective, Yinyue TV is mainly divided into two categories: live broadcast and video. For video users, they can swipe up and down to select music, which is more convenient to interact. The video will display lyrics and barrage to attract users to interact.

Figure 3.32 Kuaishou "Yinyuetai"

Paid content:

Kuaishou has introduced content payment into the field of short videos. In fact, the data performance of knowledge content on short video platforms is relatively good. According to the "Inclusiveness of Knowledge - Research Report on Short Videos and Knowledge Communication" released by ByteDance, the popular knowledge topics on Douyin include knowledge, academic master's secrets, science popularization, etc., and the cumulative number of views of each hot topic has exceeded 100 million times.

On Douyin, the number of likes for a single video related to knowledge is 1.5 times the platform's average level. The "2019 Kuaishou Education Ecological Report" released by Kuaishou also shows that the average daily viewing volume of short videos on Kuaishou's entire platform exceeded 2.2 billion, and the number of short videos in education exceeded 990,000, which reflects the space for knowledge dissemination of mobile short videos.

However, I have questions about whether users are willing to pay to learn on Kuaishou, a short video platform. Kuaishou’s current paid content mainly focuses on k12 education and skills teaching, including live broadcast and recorded broadcast.

Figure 3.33 Kuaishou paid content

Kuaishou Life:

Kuaishou's entry into local life reflects its ambitions in commercialization. The strong community attributes behind Kuaishou’s unique “Lao Iron Culture” are also an important support for its ability to carry out local life business. In the module design, Kuaishou is also emphasizing it. The attribute of "members help".

Currently, Kuaishou Life is mainly divided into five submodules: recruitment, real estate, used cars, second-hand items, and local (neighborhood + help). Kuaishou Life is different from Meituan, and is closer to 58.com, mainly as a platform for information exchange. Kuaishou has added small red dots to each submodule to attract users to click. However, according to browsing, Kuaishou Life’s platform currently has a lot of inferior advertising information and dating content. It is very important to ensure that the platform’s information is authentic and credible. Kuaishou should pay attention to this.

Figure 3.34 Kuaishou Life Interface

Study at home:

At present, major Internet giants are targeting the field of online education. Home learning is Kuaishou's layout in the education track, covering four parts: K12 education, higher education, vocational education and quality education.

Figure 3.35 Kuaishou Classroom Interface

For the Douyin Volcano Edition, its special features mainly include the following parts:

circle:

Circles are the core function of the Douyin Volcano version and are also its focus on improving the social attributes of the product. The Tik Tok Volcano Edition places the entrance of the circle on the first line of the sidebar, which is enough to show the importance. The circle interface mainly includes the circles I joined, hot discussions in the circle, popular lists and circle dynamics.

The circle of Douyin Volcano version is created by users themselves and covers a variety of categories, including interests, dating, and emotions. It is worth noting that there are many circles for rural groups, such as "rural people talk about rural affairs", "rural home-cooked meals", etc. The products even use "new countryside" as an independent collection of circles.

This indirectly reflects that there are a large number of rural users in the Douyin Volcano version. After users join a certain circle, they can browse and create content, including two forms: pictures, texts and videos. There are also popular content, the latest content, hot discussions in this circle, and the most popular circle friends as content guidance. Most users in the same circle have relatively close user characteristics or hobbies, and are also more interested in the content of the circle content. This form can significantly enhance the user's stickiness.

Figure 3.36 "Circle" function of TikTok Volcano Edition

Money Driven:

The predecessor of the Douyin Volcano Edition, "Volcano Video", attracted users with money incentives at the beginning of its launch, and the Douyin Volcano Edition also retained this design. Users can get a certain amount of flame after watching short videos and visiting the person they follow. The flame can be given to other users or withdrawn. Although the value of the flame is very low (300 flame = 0.01 yuan), it can also attract some users who are sensitive to small interests.

Mini Game:

The Douyin Volcano version also has a small game page, but unlike Kuaishou, the Douyin Volcano version's small game page is a complete game store with no video or live content. The purpose is mainly to divert traffic for byte-linked casual game downloads.

Figure 3.37 Volcano mini game interface

square:

Volcano Video Square is a vertical content distribution center, but there are fewer categories, with only 13 categories. Compared with circles, circles are created by users themselves, with the purpose of encouraging users to create content. The quality of content in the circles is of varying quality. The vertical content in the square is screened by the platform, and the content quality is relatively high.

Figure 3.38 Square function of Douyin Volcano Edition

User level construction:

Among these three products, Douyin Volcano Edition is the only product that builds user-level. The user's level and experience value are directly linked, while the user's experience value comes from the number of flames they have. As the level increases, users can obtain volcanic identity. The user level system is a commonly used user operation method in communities such as Tieba and forum, which can enhance users' personal sense of honor and pride.

Figure 3.39 User level function of TikTok Volcano Edition

Summarize:

Finally, the functional architecture of the three products is summarized. In general, both short video products, Douyin and Kuaishou, and Douyin Volcano versions have similar basic modules, including browsing, shooting, interaction, etc. However, different products also have unique features.

Relatively speaking, the overall functional design of Douyin is the simplest. It is basically a pure short video + live content distribution product. It can be compared to the combination of "Weibo + Yingke" in the short video field, while the Kuaishou and Douyin Volcano versions are more complicated.

The two are similar from user groups to product design. First of all, both attach great importance to the construction of user social relationships. The goal is to build the product into a community based on short videos. At the same time, both Kuaishou and Douyin Volcano versions attach great importance to the construction of vertical content. From the perspective of product extension, Kuaishou's extension scope has been extended to games, e-commerce, knowledge payment, online education and Kuaishou life, and has gradually become a comprehensive app.

3.2.2 Product function comparison chart

Here we sort out the functions of Douyin, Kuaishou and Douyin Volcano Edition, and present them in the form of a table as follows:

Table 3.5 Product function comparison chart

3.3 Performance and interaction layer

Here I will briefly talk about the UI design and product interaction of the three products.

First of all, from the overall style of product design, the overall color scheme of Douyin is "black + white", and it is also paired with some colorful icons. This simple and clear design style gives people a cool and trendy feeling.

Figure 3.40 The overall interface of Douyin

Relatively speaking, the designs of Kuaishou and Douyin Volcano versions have a slightly "rural" atmosphere. Due to the double-row waterfall flow display, the form of the video cover with text looks a bit messy. The cover title of Kuaishou is relatively clear because it has a background color, while the white font of the TikTok Volcano Edition video title is very unfriendly to the visual experience under the cover background.

Figure 3.41 Interface design of Kuaishou and Douyin Volcano versions

From an interactive perspective, the basic interactive functions of the three products are quite consistent (such as clicking to pause, double-clicking to like, etc.). Here we focus on analyzing the interactive differences between the following Kuaishou normal mode and the large-screen mode. In Kuaishou's normal mode, it is impossible to switch videos by swiping up and down. After browsing the video, you need to exit and re-select. In the large screen mode, one unique feature is that the user can swipe left to open the author's entire work to choose to watch.

Figure 3.42 Kuaishou's large-screen mode

3.4 Content layer

3.4.1 Content distribution mechanism

Douyin and Kuaishou have opposite content distribution mechanisms. Douyin adopts a centralized content distribution mechanism, while Kuaishou adopts a non-centralized content distribution mechanism, which is related to the product positioning, vision and strategy. (Considering that the distribution mechanism of the Douyin Volcano version is similar to that of Kuaishou, I will not discuss it here)

1) TikTok mode

Douyin adopts a centralized distribution logic. For all users' videos, they are recommended first from a small traffic pool (maybe only a few thousand people). The initial traffic pool includes 90% of tag users + 10% of followers, and then select videos with better data to give a higher volume (ten thousand, hundreds of thousands).

Finally, recommend the best content on the platform to the homepage. This distribution logic based on content quality can easily produce a head effect. Because celebrities and KOLs have a large number of fans and their video quality is relatively high, users often see this type of video.

The advantage of the centralized distribution mechanism is that it is easy to create hot products, and the content presented by the platform is generally of high quality, and the disadvantage is that it ignores a large number of ordinary users. At the same time, this strong distribution logic makes it difficult for users to link in depth between content creators, which is not conducive to the development of social attributes.

Figure 3.43 Douyin’s content distribution model

2) Quick mode

Kuaishou adopts a decentralized distribution mechanism, and video recommendations are relatively scattered, striving to allow ordinary users to have the opportunity to be seen in the initial traffic pool to be allocated to 60-70% of tagged users + 30-40% followers, which allows users to form their own private domain traffic.

The advantage of decentralized distribution logic is that it can significantly strengthen the enthusiasm of ordinary users, and at the same time strengthen the link between content creators and fans, which is also the basis for the birth of the "old iron economy". The disadvantage is that weak operation control leads to uneven content in the platform, and the user's immersive experience is weaker than that of Douyin, which affects the efficiency of commercial monetization.

Figure 3.44 Kuaishou’s content distribution model

Different distribution models have created different product attributes of Douyin and Kuaishou. Douyin’s media attributes are stronger, Kuaishou and Douyin Volcano versions have stronger social attributes, Douyin’s content is cooler and more beautiful, while Kuaishou’s content is more realistic. Judging from the number of fans, the proportion of Douyin’s top accounts is greater than that of Kuaishou, and the proportion of Kuaishou’s waist accounts is greater than that of Douyin. The number of Douyin KOLs is also higher than that of Kuaishou.

Figure 3.45 Number distribution of KOLs in each platform

3.4.2 Content preference comparison

Here we compare the user content preferences of different products:

1) Tik Tok

Figure 3.46 TikTok users prefer video types

According to the content viewing report released by Juliang Engine, the most preferred video content for Douyin users is: life, interpretation, food, animals and plants, sports, culture, fashion, film and television creativity, automobile, travel, parent-child, and dance. Among them, film and television and cultural videos have grown rapidly in 2019. There are obvious differences in interest categories between male users and female users.

2) Kuaishou

Figure 3.47 Vertical content that Kuaishou users like

According to the "Kuaishou Creator Ecological Report 2019" released by Kuaishou, the vertical content that Kuaishou users love mainly includes sports, food, animation, stars, cars, cute pets, life, emotions, etc.

3) Tik Tok Volcano Edition

Figure 3.48 Vertical content distribution of volcanic short video

According to the 2019 Volcano Short Video Content Ecological Report, taking March 2019 as an example, the vertical content that Volcano Short Video users prefer include: Suipai, tourism, food, rural areas, parent-child, benefit, talent, etc.

Through comparison, we can find that for users of each product, videos of food, life and talent are more popular. Relatively speaking, users of Douyin prefer fashion, culture, beauty and makeup videos, while users of Kuaishou prefer animation, emotions, and game videos. Users of Volcano Short Video prefer videos such as rural areas and craftsmanship, which is determined by the respective user groups of different products.

4. Commercialization model

The degree of commercialization is also an important indicator for judging the development prospects of a product. It is impossible to make profits at the moment and must also have good profit prospects in the future. Only in this way can the product obtain far-reaching capital support.

Douyin and Kuaishou's current profitability are in the first echelon among Internet products, but the commercialization models of the two are different. Let's compare them here. In addition, since the Douyin Volcano version has been included in part of the Douyin product system, it can be foreseen that its future commercialization model is similar to that of Douyin, so I will not discuss it for the time being.

4.1 The main commercialization model of short video products

The commercialization model is divided into two aspects: revenue and cost. The main revenue of short video products can be divided into four parts, namely advertising, e-commerce, live broadcast, expansion (content payment, games, promotion and other auxiliary functions), and the investment cost mainly includes three parts, namely content cost, product operation cost, and user acquisition cost.

Among different sources of income, the gross profit margin of advertising is relatively high. Referring to the data of Facebook and Weibo, it is estimated that it can reach more than 80-90%. The share of live broadcast platform users is hiding around 55, and the gross profit margin is estimated to be around 50%. There is no clear data support for the gross profit margin of e-commerce and expansion functions.

Figure 4.1 The main sources of revenue for short video products

4.2 Comparison of commercialization between Douyin and Kuaishou

Douyin's commercialization path was launched relatively early, and the current model is very mature. Douyin's annual revenue in 2019 is expected to be around 75 billion, and its revenue mainly comes from advertising (accounting for more than 80%). Douyin's immersive experience is more friendly to the delivery of information flow advertising, and users' consumption potential is also very large.

At the same time, ByteDance has a sales team of tens of thousands of people as support. In addition to advertising, platform commissions (star map + live broadcast share + e-commerce traffic diversion) and DOU + traffic promotion are also important revenue components. In the future, it is expected to gradually release the monetization potential in games, e-commerce, knowledge payment and other aspects.

Figure 4.2 2019 TikTok revenue composition

Compared with Douyin, Kuaishou's commercialization started late. In the early days, Kuaishou's commercialization was slower in order to avoid the impact of a large number of commercialization on the community attributes and user experience. However, after 2018, facing the dual pressure of capital and Douyin, Kuaishou also began to accelerate its commercialization.

Kuaishou's annual revenue in 2019 is expected to be around 55 billion, but unlike Douyin, Kuaishou has strong community attributes and high-quality private domain traffic. Its current revenue is mainly live broadcast (expected to account for 60%+ in 2019), e-commerce traffic diversion, and advertising. At the same time, Kuaishou has also begun to explore multiple fields such as games, education, paid content, and local life.

Figure 4.3 2019 Kuaishou’s revenue composition

Next, we will analyze Douyin and Kuaishou based on different commercialization models.

1) Advertising

TikTok's advertising can be divided into 5 types, including information flow advertising, open-screen advertising, brand challenge, KOL implantation and corporate blue V. Among them, information flow advertising is the most mainstream advertising form. Overall, TikTok has rich advertising formats and high creative interaction, and immersive product design reduces the user's avoidance effect. On the other hand, Douyin user group has strong consumption capacity, so it is favored by brand advertisers.

Kuaishou’s advertising types also have five major types, including information flow advertising, tab advertising and fan headlines that are directed to the brand, quick order reception platform for KOL, and creator incentive plans for waist-end creators. According to the user experience, Kuaishou's advertising ratio is not high, so there is also a big gap between revenue and Douyin.

Figure 4.4 UGC platform's expected advertising revenue in 2019

2) Live broadcast

From the perspective of live broadcast, Kuaishou's live broadcast is developing relatively fast, with its current DAU exceeding 100 million, far exceeding traditional live broadcast products such as Huya Douyu (about 1500w). The prosperity of Kuaishou's live broadcast business is due to the private domain traffic formed by its strong social attributes. According to statistics, 90% of Kuaishou's live broadcast audiences come from private domain traffic. In terms of live broadcast, Kuaishou has begun to increase investment in vertical fields such as games and education to tap into business potential.

Douyin's live broadcast business went online later than Kuaishou. In 2019, it began to invest a lot of resources in the live broadcast industry and caught up. Especially after the integration of Volcano Video into Douyin, Volcano Video's live broadcast was relatively mature, which is also a good addition to Douyin.

Figure 4.5 The sharing of some live broadcast platforms

3) E-commerce

From the perspective of e-commerce development, short video + e-commerce has become the trend of the times. Douyin and Kuaishou have formed e-commerce modules for products, including self-operated e-commerce and third-party e-commerce platforms, Kuaishou and WeChat mini-programs.

Douyin mainly relies on information flow advertising, live broadcast and short video advertising to attract users to purchase. By computing advertisements, users recommend products they are more interested in, and users are relatively sensitive to product prices. Kuaishou's "old iron economy" form is to recognize people and sell goods. When the anchor recommends it, users prefer products with high cost-effective and practicality.

Relatively speaking, Kuaishou is more radical than Douyin in its e-commerce business layout. While connecting with Taobao, Pinduoduo and Youzan, Kuaishou has also connected to the "Magic Chop Star Selection" he invested in and built his own "Kuaishou Store"; in addition to connecting his own Taobao Pinduoduo Youzan store to Kuaishou, merchants can choose to directly put the products on the shelves through the "Kuaishou Store" channel. The two main forms of income are the commissions made for third-party platforms and the self-operated platforms to obtain profits.

Figure 4.6 Analysis of Douyin Kuaishou’s sales model

4) Game

There is no doubt that the money-making ability of the game is. Both Douyin and Kuaishou have made arrangements for the game business, and Kuaishou mainly adopts the form of game live broadcast/short video + game advertisements. Kuaishou will give game content no less than 10 billion exposures every month on the "Discover" and "Same City" pages, and at the same time, it has specially opened up a live broadcast section for game verticals. Douyin does not have a special game section, and ByteDance’s games are mainly driven through the volcanic version of Douyin.

5) Paid content + education

Educational content and knowledge-based content are an important part of the short video content ecosystem, and learning on B station, Douyin and Kuaishou is no longer a new thing. Various platforms have laid out knowledge tracks and explored monetization. Kuaishou has launched two major sectors: paid content and Kuaishou Classroom. According to the public release of Kuaishou, 51% of the authors on Kuaishou’s platform currently use short videos to sell courses, of which 95.2% gained profits; 43% of the authors sell courses in the live broadcast room, of which 94.9% gained profits.

As of August 2019, the cumulative number of paid users has exceeded 1.6 million. It covers K12 education, vocational education, skills education and other contents. This type of course is cheap and has considerable sales. ByteDance started a new business and did not set up an education entrance directly within Douyin, but developed or acquired products such as VIPKid, Tsinghua and Peking University Online School.

5. Summary and thinking

5.1 Report summary

The reason why Douyin can quickly surpass Kuaishou in terms of user scale is that it now exceeds 100 million daily active users, including many factors, not only involving the product design level, but also product operations, company strategy and other factors.

(1) Content level

The core competitiveness of short video platforms is always content, and whether the content can attract users is an important factor in determining the retention rate. Because of the centralized distribution mechanism and powerful algorithm recommendations based on Toutiao. , the short videos pushed by Douyin on the recommendation page are mostly content with good data, high content quality or viral transmission.

Kuaishou’s non-centralized content distribution makes the content quality of the homepage uneven. Although this universal distribution mechanism gives users an equal opportunity to be seen, it can also improve the level of user participation and accumulate social relationships, it is not conducive to leaving new users in a short period of time, and it has formed a stereotype of “vulgar and sinking” among the public.

In addition, Douyin focuses on the import of celebrities and MCNs, and celebrities and internet celebrities have strong appeal. In the early Weibo battle, Tencent and Sina fought hard while competing for celebrity resources. A traffic star entry platform may bring hundreds of thousands or millions of users. In the early days, Kuaishou was guided by real and universal, and he did not pay much attention to the resources of MCN and celebrities. Kuaishou's top users were more of grassroots groups.

(2) Product design level

In terms of product design, according to personal experience, among the three products, Douyin, Kuaishou, and Douyin Volcano Edition, Douyin's product design is the simplest, whether it is the functional architecture or the UI interface. Simple interactive operation reduces the user's usage cost, and the automatic playback mode of a single-column large screen can also enhance the immersion, which plays an important role in extending the user's usage time.

Kuaishou used the form of double-row waterfall flow in the early days. Although it gave users the right to choose freely, it was not very immersive and could easily cause user loss. In addition, Douyin has been constantly iterating its products, constantly improving shooting and production functions, platform gameplay, and community functions.

(3) Operational level

Operations are very important for product growth. Behind Douyin's rapid progress is a strong operation team. Born in Douyin, born in the period of 4G acceleration popularization (2016 was the peak of China's mobile phone shipments, and then gradually began to decline). In the early days, it gained a certain reputation through sponsoring programs such as "China Has Hip Hop" and "Happy Camp".

During the 2018 Spring Festival, Douyin began to make efforts and spent a lot of money to sponsor the Spring Festival Gala of major satellite TV stations. After the Spring Festival, Douyin ranked first in the App Store download list for 16 consecutive days. In addition to commercial naming, Douyin also launched a special challenge event to attract users to participate. With the accumulation of early marketing and operations, Douyin began to achieve an index explosion after April 2018.

Kuaishou focused on products and neglected operations in the early days, maintaining a "Buddhist" attitude. Most users rely on natural growth, and the growth curve is relatively slow. Kuaishou even introduced the concept of spokesperson at the end of 2019, announcing Huang Bo, Xie Na and Zhang Jie to become Kuaishou's spokespersons and carried out publicity in combination with the Spring Festival Gala.

(4) User positioning

Douyin's early target users were young groups in first- and second-tier cities. Music, street dance, hip-hop and other contents with the label "cool trend" are the main contents of its platform. Then as the user scale expands, the content scope becomes more prosperous. Kuaishou's early target users were subsidiaries in third- and fourth-tier and rural areas. The early content was mostly sitcom dramas, quotations, talents, etc., with uneven content, and there were also a large amount of vulgar content.

Therefore, in the process of user growth, Douyin has penetrated from top to bottom, which is easier for users to upgrade their content consumption, while Kuaishou needs to make breakthroughs from bottom to top, which is a challenge for the overall content construction of the product and the change in brand tone.

Going back to the second question I originally asked, what is the strategic purpose of ByteDance to update the Volcano Video to the TikTok Volcano Edition? First of all, Volcano Video was founded to benchmark Kuaishou. It is highly consistent with Kuaishou in terms of product design and target user group. Its current daily active users are around 50 million, but its growth prospects are not good, due to a lukewarm state.

Faced with Kuaishou, which has been no longer Buddhist in recent years, ByteDance's merger of Douyin Volcano further widened the gap in user size with Kuaishou and used a concentrated way of playing to snipe Kuaishou. At the same time, the user groups of Douyin and Volcano Video are naturally complementary, covering all user groups from first-tier cities to rural areas. High-quality content can be distributed on two platforms to obtain double exposure. Volcano Video's more mature live broadcast and social system can also complement Douyin.

In addition, resources can be integrated to better reduce internal personnel consumption and struggles. However, the product logic and distribution mechanism of the Douyin Volcano version are similar to Kuaishou. It is naturally opposite to Douyin. The content preferences of the two products also differ. How to balance will be the next difficulty of spoofing.

5.2 Thoughts on the Future

Judging from the current market structure, the short video industry will not undergo much change in the short term, and the head is still the tug-of-war between Douyin and Kuaishou. At present, the short video industry mainly needs to break through two major difficulties. First of all, the pan-entertainment services provided by short videos are different from instant messaging, e-commerce and other services. This non-essential service is highly substitutable and the moat is not deep.

In addition, the short video industry currently harvests users' traffic from the short video industry. According to the principle of diminishing marginal effects, the cost of obtaining traffic will become higher and higher in the future. Currently, the overlap between Kuaishou and Douyin is as high as 46.5%, and the big Vs on the platform are also penetrating each other. 70 of the top 100 Kuaishou’s top 100 big Vs are Douyin users, and 50 of the top 100 Douyin’s top 100 big Vs are Kuaishou users.

Whether it is Douyin or Kuaishou, if you want to achieve growth, you must reach the other party's hinterland. Today, Kuaishou and Douyin are developing towards the "full-field short video + live broadcast" platform. As Su Hua said, "In essence, we are very different products from Douyin, but we just meet together on the way to their respective end points. In the future, Kuaishou and Douyin will confront each other in many aspects such as product, operation, and commercialization. Here is a brief analysis.

(1) Douyin and Kuaishou have entered multiple tracks, Kuaishou is no longer Buddhist

Currently, Douyin and Kuaishou are both planning to make arrangements in multiple tracks, among which Douyin focuses on the e-commerce field, especially to use live streaming as one of the most important channels for monetization in the future.

Douyin signed Luo Yonghao to conduct live streaming sales in March 2020, and held its first live streaming show on April 1, 2020. The total amount of live streaming payment transactions exceeded 110 million. At the same time, Douyin has significantly reduced the number of users who can publish shopping cart videos. In addition, the next focus of Douyin may be on the refinement of content operations. Compared with Kuaishou and Douyin Volcano versions, Douyin's vertical content operations do not have an advantage.

In addition to games, Kuaishou has invested in tracks such as 2D and knowledge payment that are relatively in line with first- and second-tier cities. In addition, Kuaishou has also led the investment in Zhihu's F round of financing, trying to introduce more heavy and core knowledge content, and the trend of upward upgrading is obvious.

In 2019, Kuaishou executives and product team went to Chongqing to conduct a user survey, which was called the "Chongqing Conference". After the Chongqing Conference, Kuaishou began to no longer be Buddhist, and put forward the goal of 300 million DAU before the Spring Festival in 2020 (it has been achieved at present), and sponsored the 2020 CCTV Spring Festival Gala with a large amount of 1 billion red envelopes. In addition to strengthening operations, Kuaishou has also vigorously expanded its product matrix, including Kuaishou's fast version, large-screen version, as well as its social products and game products.

(2) Short videos go overseas and focus on overseas markets

With the growth of domestic users, short video products have begun to "go overseas" strategy, with East Asia and Europe and the United States being key regions. At present, TikTok, an overseas product of TikTok, has achieved "small success", with overseas downloads exceeding 1.5 billion, ranking fourth in the global APP downloads in 2019. Kuaishou's overseas product Kwai currently only has a place in Brazil, and it is difficult to break through in the short term.

Figure 5.1 Global Download Ranking of 2019 APP

Figure 5.2 Comparison of Tiktok and Kwai's global IOS rankings

(3) The impact of 5G on short videos

The implementation of new infrastructure projects and the acceleration of commercialization of 5G will have profound changes to all industries, and the short video industry is no exception. The development of information technology is a prerequisite for product innovation. The important reason why short videos have entered the hot spots after 16 years is the development of 4G and the speed of traffic reduction and speed up.

In the 5G era, due to the characteristics of large bandwidth, large connections and low latency, short videos and real-time live broadcasts will become the mainstream channels for users to consume content. At the same time, the Internet of Things brought by 5G will integrate short videos with more application scenarios. In the future, interactive video modes such as AR, VR, MR, 360-degree video and interactive video modes have great growth potential.

Author: carmanzzz

Source: carmanzzz