Zhihu product analysis!

Zhihu was founded in 2011 and has been in operation for 10 years, becoming the largest question-and-answer community in China.

Before 2013, we adopted an invitation-only system and established a serious, professional and friendly community prototype. After that, the invitation system was cancelled and the number of users surged. At that time, the community atmosphere and content quality were still acceptable.

It began to commercialize after 2016, including the launch of "Zhihu", "Zhihu Live", "Knowledge Market", "Strictly Selected Members", "Live Broadcast Zone", and "Video Production" tools.

It went public in the United States on March 26, 2021. Its revenue in the third quarter of 2021 increased by 115.1% year-on-year, and its MAU increased by 40.1% year-on-year, but its losses continued to expand. As of January 14, 2022, the stock price has fallen by 42%. It remains unknown how to expand monetization channels and find growth points in the next step.

This article starts with the 2021Q3 financial report, reviews the development history of Zhihu and other question-and-answer platforms, explains the product status, core competitiveness, version iteration and user feedback, as well as current problems for your reference. The core ideas are as follows:

1. Competition landscape

The question-and-answer platforms that emerged in the PC Internet era gradually declined, and the question-and-answer platforms in the mobile Internet era have experienced ups and downs. Only Zhihu has embarked on the path of marketization. Zhihu has no rivals in the question-and-answer field, but it has many broad competitors, including Bilibili, Xiaohongshu, Kuaishou, Douyin, Weibo, and Douban.

In terms of penetration rate, Zhihu is far behind Weibo, but higher than Baidu Tieba.

2. Product Status

As the core area of ​​public discussion on the Chinese Internet, Zhihu has produced 420 million pieces of content, including 368 million questions and answers, providing everyone with solutions to their problems. MAU in Q3 2021 was 101.2 million.

Product matrix: Zhihu Daily, Dudu Daily, King of Knowledge, Jiying (short video platform), CHAO (male recommendation community), etc. were previously launched. Except for Zhihu Daily which is still in operation, all other products have been offline.

Positioning : Sense of achievement has become the yardstick for Zhihu to measure content.

How to achieve a 40% growth in MAU?

1. Marketing drives growth
2. New users are mainly "sister-in-law" and college students

Profitability:

1. The losses are still growing. The adjusted net loss narrowed from RMB 200 million in the second quarter to RMB 112.4 million. The net loss narrowed from the previous quarter, but increased by 41.9% year-on-year from RMB 79.2 million in the same period last year.
2. We continue to increase investment in e-commerce and other businesses, which will have a greater impact on users' purchase of digital products, small household appliances and other products.
3. In the third quarter of 2021, the revenue from content business solutions was RMB 278 million, a year-on-year increase of 511.5%. The content business solution is that Zhihu helps companies invite well-known influencers, who will write soft advertisements for the companies in the form of questions and answers. Some of them will include product links in the content, or provide companies with services such as homepage exposure.
4. Membership revenue increased by 95.98% year-on-year, but accounted for 5.43% of Zhihu's total monthly active users of 101.2 million during the same period. Browsing user reviews, we can see that a considerable proportion of paid members come here to read online articles.

3. Core Competitiveness

1. The core area of ​​public discussion on the Chinese Internet
2. Rich and professional questions and answers
3. The community atmosphere is relatively good: in the early days, a lot of interactions and collisions of ideas brought excellent answers and new concepts, but now the topic of male-female confrontation often causes verbal battles on Zhihu.
4. Operational capabilities: The community rules are relatively complete.

Currently, we focus on new and hot contents. Content operations have a certain ability to follow hot topics and are good at using labeling and content integration to make high-quality content get higher exposure.

Joint creation makes highly praised graphic and text content more attractive and, to a certain extent, prevents it from being copied by others.

Activities such as "Our Questions and Answers" and "New Knowledge Youth Conference" were launched online, but there were few activities that went beyond the circle.

4. What product revisions have been made since December last year?

In the December revision, Zhihu officially became a content community with algorithm recommendation as its distribution logic and pictures, texts and videos as its main media.

1. Video, recommendation, and hot list have become the three main functions of the main interface
2. Messages of user approval, likes, thanks, comments, reposts, private messages, etc. are placed in the upper left corner. This position has the least clicks on the entire page, and then moves to the bottom tab bar.
3. Information such as content updates, likes, and reposts of users’ followers are squeezed into a separate secondary page.
4. The search has been moved from the top of the page to the bottom of the channel, and the interface is very similar to a search engine.
5. The dynamic sorting of people you follow can be freely selected by time, default sorting, etc.

User feedback:

1. Zhihu: The most common problem regarding product revisions is the requirement that no videos appear in any section.
2. Weibo: Negative comments include too many short videos of low quality (37%) and too deep entrances to news and other sections (22%), but the sample size from December to date is only 27, so the reference value is low.
3. App store: Negative comments mainly focused on too many advertisements (23%), too many videos that played automatically (12%), a strong atmosphere of confrontation between men and women on the platform (10%), forced registration and login (8%), hidden functions such as private messaging and news (8%), etc. There were 491 valid samples in total, of which 372 were negative comments.

5. Problems

1. Content quality declines: The quality of discussion becomes lower and no strong output concepts can be generated.
2. The community atmosphere has deteriorated: there are too many confrontational remarks between men and women. The question "Can boys really not accept dowries?" has 13,295 answers, over 300 million views, and over 80,000 comments with answers, setting a new record for the number of comments under a single answer.
3. Commercialization and product experience are separated: From Zhihu's promotion of paid knowledge, to the revision of the homepage timeline to the current strong promotion of videos, MAU data has been rising steadily, but it has consumed the user experience.
4. The video conversion is crude: a tool for converting text and pictures to video has been launched, but it only converts text into ppt videos, which makes it less watchable.
5. Conflict of interests between content creators and platforms: a. Content from high-quality creators does not get exposure; b. Revenue is far lower than other platforms; c. Accumulation of fans is very slow.
6. Self-produced programs/IPs failed to gain popularity
7. Stricter regulation

1. Question and Answer Platform Market

Zhihu is the largest question-and-answer community in China and one of the top five online content communities in the country. The market for knowledge questions and answers has always existed. From Baidu Knows in 2005 to Wukong Q&A in 2017, question-and-answer products have undergone a major reshuffle, with some having ceased operations or no longer in demand.

1. The question-and-answer platforms that emerged in the PC Internet era are gradually declining

Sina iAsk was born in July 2004, Baidu Zhidao was launched in June 2005, Tencent Soso Wenwen was launched in April 2007, and Tianya Q&A, a social question-and-answer platform under Tianya Community, was born in August of the same year.

Baidu Zhidao’s point reward mechanism can encourage users to answer questions, but there are many homogeneous and irrelevant answers, which leads to user loss. Copyright supervision has become stricter, making a large number of posts invalid.

In early 2014, Tencent Soso Wenwen was officially merged into Sogou Wenwen. Sogou Wenwen was widely criticized by netizens for plagiarism and its influence was no longer as strong as before. In the same year, Sina iAsk's information sharing platform was investigated, which caused a considerable impact on Sina iAsk. The rise of Tianya Forum was a bonus from the BBS era. However, with the reduction of Internet access costs and the emergence of commercial products such as Weibo, it gradually declined.

2. In the era of mobile Internet, Q&A platforms have experienced ups and downs, but only Zhihu has embarked on the road of marketization

There is no shortage of newcomers to the question-and-answer platform.

In early 2011, Zhihu was launched and stood out in the question-and-answer community.

In 2012, 360 Q&A began to operate with the strong security technology support of Qihoo 360.

In 2016, Weibo Q&A and Toutiao Q&A were launched, and Fenda became the leading voice Q&A platform in China with its paid voice Q&A model.

The latter was taken offline in August 2016. After returning to people's attention, it only had three sections left: workplace, health and science popularization. In 2018, it was renamed "Zaixing Yidian" to form a complete knowledge-based paid product system, but it did not make any splash.

In 2017, Toutiao Q&A was upgraded to Wukong Q&A, and then poached 300 big Vs from Zhihu, offering a high price of 500 yuan for a single answer. In 2018, it was merged into Weitou. It was in a semi-abandoned state and collapsed at the beginning of 2021, which was the tenth anniversary of Zhihu's launch. The practice of purchasing high activity from outside through high subsidies is difficult to sustain. Some analysts believe that the lack of its own community atmosphere has always been a problem that Wuguoqiaodian has not solved.

3. Zhihu’s competitors have expanded to include mid-length videos, grass-growing communities, short videos, Weibo, etc.

Broadly speaking, Bilibili, Xiaohongshu, Kuaishou, Douyin, Weibo, and Douban are all competitors of Zhihu. They can provide similar services to users, but the user's time is the treasure that the products want to seize.

Bilibili's MAU in Q3 2021 was 267 million, and its DAU was 72.1 million, up 35% and 36% respectively from the same period in 2020. Its user stickiness indicators DAU/MAU and average daily usage time per person were the highest in the industry, at 31.6% and 87.1 minutes respectively. Q3 revenue reached 5.21 billion yuan, but the stock price continued to fall.

Since its listing in February 2021, Kuaishou's stock price has been falling since its opening surge, and by December it had fallen by 3/4. In Q3 2021, Kuaishou's DAU reached 320.4 million, MAU reached 572.9 million, and total revenue was 20.5 billion yuan.

Data from Quest Mobile shows that since March this year, Xiaohongshu's MAU and DAU have been rising. In August, its MAU exceeded 130 million and its DAU exceeded 45 million. However, searching for notes on Xiaohongshu and then purchasing them on other e-commerce platforms is a behavior of "making wedding dresses for others", which is a chronic disease that Xiaohongshu has repeatedly tried to get rid of but has been unable to do so. Relevant data shows that in the fourth quarter of 2020, Xiaohongshu ranked 7th among China's cross-border retail e-commerce, with a market share of only 2.4%.

In August 2021, Weibo successively took down the "Star Power List" and super topic community celebrity classification "points support" mechanism. The Q3 2021 financial report showed that the MAU reached 573 million, the DAU reached 248 million, and the revenue reached US$607.4 million, a year-on-year increase of 30%. Douban was founded in 2005, and it has been 16 years since then. In 2021, it was taken off the shelves after 21 penalties and fined more than 10 million yuan, which was largely related to the inadequate review of user comments in the "Group" function.

DAU, MAU and profitability of Zhihu and its broad competitors in Q3 2021

Note: Xiaohongshu data comes exclusively from 36Kr | Xiaohongshu completes a new round of financing of US$500 million, with a post-investment valuation of up to US$20 billion

4. Compared with similar knowledge communities, Zhihu has a large room for improvement in penetration rate and a relatively good retention rate.

In terms of penetration rate, Zhihu is far behind Weibo, but higher than Baidu Tieba, with a daily active user penetration rate of 1.93% and a monthly active user penetration rate of 5.27%. Compared with similar knowledge communities, there is still room for penetration.

In terms of retention rate, Zhihu's daily retention and monthly retention reached 62% and 50% respectively. Considering similar community products, Baidu Tieba and Weibo have stronger social attributes. As a content platform mainly based on pictures and texts, Zhihu has a relatively good overall retention rate, but there is still room for improvement.

2. Product Overview

1. Development History

Zhihu 1.0 period, KOL training stage: Zhihu was an invitation-only platform in its early days, with only 200 seed users, but they were extremely active, including Kai-Fu Lee, Ma Huateng, etc. Along with these contents, the prototype of Zhihu's serious, professional and friendly community was also born.

Zhihu 2.0 period, a period of rapid growth: In 2013, Zhihu officially cancelled the invitation system and opened registration, expanding rapidly and starting to move towards a sinking route, on the one hand expanding the diversity of answerers, on the other hand lowering the threshold for ordinary users. As all content communities develop, they are bound to impact the original community atmosphere, and Zhihu is no exception. However, thanks to the accumulation of the 1.0 period and Zhihu's operating strategy, the serious, professional and friendly community spirit has not been diluted too much. During this period, Zhihu has accumulated a large amount of high-quality content and high-quality users.

Zhihu 3.0 period, the commercial transformation stage: In 2016, the era of paid knowledge began, and Zhihu successively launched products such as Zhihu, Zhihu Live, and e-books. In 2019, Zhihu officially launched the Yanxuan membership and started the paid knowledge membership system. Zhihu began to work hard to explore commercial opportunities.

2. Product Status

Zhihu currently ranks first in terms of revenue scale and market share among domestic Q&A communities. There are basically no alternative products of the same kind. Zhihu is unique as a knowledge-sharing Q&A community. Daily active users open Zhihu 6.2 times per day on average, with an average of 675.7 million interactions per month.

(1) Product Matrix

Zhihu is celebrating its 10th anniversary online. In addition to adding functions such as Zhihu Live and Zhihu within the product, it also has Zhihu Daily, Dudu Daily, King of Knowledge, Jiying (short video platform), CHAO (male planting community), etc. Except for Zhihu Daily which is still in operation, all other products have been offline.

King of Knowledge: In January 2018, the “Chongding Conference” popularized by Wang Sicong began to ferment. Seeing the trend, Zhihu belatedly launched “King of Knowledge” on February 12, but it was immediately stopped by regulators.

Jiying: In March 2019, the daily active users of Douyin approached 300 million. Zhihu followed the trend and launched the short video platform "Jiying", but in less than 3 months, the platform was "shut down due to failure to meet expectations."

(2) Positioning

On December 13, 2021, Zhihu CEO Zhou Yuan delivered a keynote speech titled "Sense of Gain is the Greatest Common Divisor of the Development of the Content Industry", saying that since the "sense of gain" standard was proposed in May this year, it has become the yardstick for Zhihu to measure content. There are three main criteria for "sense of gain" content: broadening horizons, bringing help or triggering resonance. Zhihu’s positioning has shifted from “professional” to “resonance” with a wider impact.

3. Users

User distribution:

According to the company's prospectus, in December 2020, 56.90% of Zhihu users were male, while 43.10% were female. Young people under the age of 30 account for as high as 78.70%, while those over the age of 30 account for 21.30%. More than half of the users are in first-tier or new first-tier cities, and nearly three-quarters of the users are distributed in first- and second-tier cities, with high user value.

How to achieve a 40% growth in MAU?

（1）Marketing drives growth

According to All-Weather Technology’s article “Without “knowledge”, what is left of Zhihu? ”, behind the user growth is the rising marketing costs. In the first three quarters of this year, Zhihu’s marketing expenses were 347 million yuan, 443 million yuan, and 375 million yuan, respectively, a year-on-year increase of 176.4%, 202.0%, and 70.6%. Overall, the growth rate of Zhihu users is much lower than the growth rate of marketing expenditure.

(2) New users are mainly "sisters-in-law" and college students

At the beginning of 2020, Zhihu launched a round of expansion to achieve a new round of monthly active user growth. According to a person close to Zhihu, this expansion is mainly aimed at two groups of people: "sister-in-law" (Zhihu's internal name for women in third- and fourth-tier cities) and college students. In addition to further increasing monthly active users, they also undertake the commercial conversion goals of Zhihu's paid membership and education closed loop respectively.

4. Creators

As of Q4 2020, the total number of content creators on Zhihu platform reached 43.1 million, with an average of 3.3 million active content creators per month and an average of 75.7 million active users per month. In Q3 2021, the number of creators reached 53 million, with an average of 3.64 million active creators per month, among which the average monthly video creators increased by 86% year-on-year. Creators come from diverse backgrounds and professional fields, and can gain recognition on the platform and earn income through business content, product recommendations, and paid consulting.

3. Core Competitiveness

1. The core area of ​​public discussion on the Chinese Internet

From sentences like "What kind of experience is XXX?" and "How do you evaluate XXX" to "laxative (thank you for the invitation)"; to words like "involution" and "test-taker" that have penetrated into the lives of ordinary Chinese people, they are all directly related to Zhihu.

2. Rich and professional questions and answers

Since Zhihu was launched in January 2011, as of November 2021, it has accumulated 420 million pieces of content, including 368 million questions and answers, covering hardcore science, bizarre daily life, interesting ideas, emotional healing and other aspects. With the intervention of algorithms, creators are more inclined to answer current hot topics, emotional hype-related topics, and use video as a medium to obtain higher traffic.

The average monthly interactions in Q4 2020 were 676 million. For some long-tail and unpopular fields, Zhihu may be the only communication platform.

3. The community atmosphere is relatively good

Zhihu rose to prominence with its question-and-answer and article-based models. The large amount of interaction and collision of ideas in the early community brought about excellent answers and new concepts, which established a moat for the content community and generated high user stickiness. But now, due to the increase in the number of users and the platform's active sinking, a large number of topics concerning conflicts between men and women have caused sarcastic comments and even insults and attacks.

4. Technical aspects

Using artificial intelligence, big data and cloud technology to optimize creation, distribution and consumption, there are already Topicrank (for evaluating content quality), Wall-E (a monitoring system that can identify comments containing "abusive" words in the first place) and Wukong (an anti-spam system).

5. Operational capabilities

Community rules formulation :

Zhihu has relatively complete community rules, covering the details of how to deal with infringement, spam, scientific falsehoods, fabricated experiences, feudal superstitions, etc., as well as the reasons for banning users and folding their answers. These rules need to be mutually exclusive and complete, which is particularly important for maintaining the community atmosphere.

Zhihu has set up 31 official accounts or certified accounts, including Zhihu Butler, Zhihu Life, Zhihu Science, etc. In addition to producing high-quality content, some accounts are in charge of different functions. For example, Zhihu Butler is responsible for rule-making, function introduction and answering user-related questions. Zhihu Zhiwu is currently used to sell beverages such as coffee and tea, as well as to produce coffee-related articles.

Content operation capabilities :

(1) Hot List & Hot Search & Recently

Currently, Zhihu focuses on new and hot content, and has operators who specialize in converting hot social events into questions to attract users to discuss. The "Hot List" is given an important position in the top tab bar on the homepage, and may account for a considerable proportion of the user's stay time. This requires a certain ability of editors to follow hot topics, and Zhihu users have their own particularities. The hot list displays 50 items. In addition to current affairs, it covers content in multiple fields such as digital products, film and television variety shows, and there are also some selected content that is not time-sensitive.

In the tab bar at the bottom, "Just Now" is given the rightmost position, which includes hot searches and what is happening. There are 50 hot searches displayed, some of which overlap with the hot list, so the display logic may be different. The logic of "What's Happening" is the latest replied content. The sorting is not based on time. My guess is that the content is mixed taking into account the field coverage.

(2) Tagging & content integration

Zhihu operators often add tags to make the content get more attention, such as hot comment tags, your attention, 24-hour hot spots, video answers liked by people you follow, etc. In addition, the interaction when reading online articles is impressive. example:

1. In the push position at the top of the APP, in the small pop-up window, labels such as "Under Discussion", "Hot Events", "Breaking News", and "Today's Hot Topic" are used.
2. In version 8.2.0, the hot list is divided into "Joint Creation", "Daily Selection" and "Must-Reads". With the end of the joint creation activities, the first category was changed to "Zhi Shi Bang". Discussions and topics rotate below. In previous versions, the hot list was divided into different fields.

1. The protagonist's answer to the question will be awarded the "Answered Personally" medal. In addition, high-quality content will be awarded medals such as "Editor's Recommendation", "Weekly Collection", and "Professional".
2. Discussions on the same topic that appear intensively over a period of time will be organized into the form of special topics.
3. For issues that concern a large number of users, Zhihu will host roundtable discussions with industry veterans in related fields.
4. Integrate the day's popular and high-quality content into the form of Zhihu Daily or Zhihu Evening News.
5. Operations staff proactively create topics and guide user discussions.
6. Added "hot comments" to the comments.
7. You can read other people's notes while reading, but you cannot comment or like them. WeChat Reading has more complete social functions, and the order is based on the latest comments.

Zhihu online article reading interface

WeChat reading interface

(3) Cultivating video content: joint creation and video answers

Zhihu launched “co-creation” and “video answers” ​​in Q3 2021. The integration of images, texts and videos was accelerated on the distribution and tool ends, with the average monthly video content upload volume increasing by 290% year-on-year, and the penetration rate of video consumption users in DAU increasing by 37%. These contents will receive traffic support on the traffic side; on the circulation side, jointly created videos will have special logos. At the same time, the jointly created videos will display the Zhihu accounts of the graphic and text creators and the video creators at the same time, increasing the exposure of the video through private distribution of both parties. "Video answer" means answering questions with video. It adds the option of video answer based on the original text and picture answers.

Source: Zhihu 2021Q financial report

(4) Event Operation

In 2021, Zhihu launched activities or projects such as "Our Questions and Answers", "New Knowledge Youth Conference", "New Knowledge Youth Says", "Answer Adventure Night", "Zhihu Back to School Season", "Live Debate Competition", "Zhihu Super Space Season", Double 11 E-commerce Promotion Super Project, "Video Competition", "Super Brain Hole Challenge", "Idol's Questions", "Invincible Sales King", "Zhihu Question Store", and "Novel Laboratory", which expanded the influence of the products to a certain extent and helped brand building. The Weibo topic reading number of "Answer Adventure Night" reached 460 million times. In addition, there were few activities outside the circle.

4. Product version changes

1. Timeline of revisions since launch

2. Recent revisions

(1) August 9, 2021 v7.23.0

Answers can be sorted in two ways: latest and default. Under the avatars of the people you follow most frequently are the latest videos. This section has been cancelled in version v8.0.0, and the dynamics can be filtered by time, intelligence, creation, video, and idea. The sorting of answers has also been changed from default and latest to include video answers.

(2) December 13th v7.39.1

Video, recommendation and hot list have become the three major functions of the main interface. Messages of user approval, likes, thanks, comments, reposts, private messages, etc. are placed in the upper left corner. This position has the least clicks on the entire page. Zhihu seems to be weakening social interaction. Search is placed in the upper right corner. Information such as content updates, approvals, and reposts of the people the user follows is squeezed into a separate secondary page, which can only be entered by clicking on the bottom, but a red "99+" mark is added. In the December revision, Zhihu officially became a content community with algorithm recommendation as its distribution logic and pictures, texts and videos as its main media.

(3) December 16th v8.0.0

After the version was launched, Zhihu’s series of revisions all revolved around search, new and hot content, and videos. "Video" has been added to the top tab bar of the main page, and the "Membership" function has been placed on the far right, which is an area with fewer clicks. The video page is similar to TikTok, except that it is not full screen; Zhihu's "Hot List" and "Happening" scroll alternately; the search box becomes very similar to a search engine; user mentions (including approval, likes, following, etc.) are in the message section of the bottom tab bar. The recommendation page not only contains questions and answers, videos, and advertisements, but also the thoughts of the people you follow. The dynamic sorting of people you follow can be freely selected by time, default sorting, etc.

(4) January 6, 2022 v8.3.0

With the end of the joint creation activities, the joint creation of the hot list was cancelled and replaced by the Zhishi list.

(5) January 18, 2022 v8.4.0

The search bar is removed and the search function is restored to the upper right corner; in the bottom tab bar, "Just Now" is removed and "Message" is replaced by "Member"; the "Message" reminder is moved to the upper left corner, which was previously "My"; the red number of messages on the "Followers' Updates" is removed. It is similar to the version on December 13, 21.

3. User Feedback

(1) Zhihu platform

According to the revision notice released by Zhihu's official account "Zhi Yisheng" and Zhihu's housekeeper, users' feedback included personal messages being buried too deep, fans' changes not being visible, and not understanding why a page could be separated out "just now". The most liked request was for no videos to appear in all sections. The above comments are displayed after screening by the author.

Zhihu’s algorithm adjustment has caused everyone to be locked in their own information barriers. There is no content that breaks the circle, and the reading volume is very low. ——Zhihu Big V Wang Zhikui Toli

(2) Weibo platform

According to Weibo users' evaluations of Zhihu's revised version since December, the most vocal voice is also dissatisfaction with the forced insertion of short videos and the low quality of short videos, including the belief that the videos are highly homogeneous, skirt the rules, and are copied. Secondly, the entrances to sections such as news and favorites are too deep, making it difficult for users to find them. Creators are dissatisfied with the current situation where their new content is not shown in the fan timeline after the revision, and that answers about writing novels receive high praise.

(3) App store

Of the reviews since December 2021, 119/491 (24%) were positive, but most of them were likely fake reviews, and the others were basically one or two stars. The problems reported by users mainly focus on too many advertisements, too many videos that play automatically, a strong atmosphere of confrontation between men and women on the platform, forced registration and login, crashes and freezes, low-quality content, and hiding of private messages, news, favorites, columns, and issues of concern. In addition, there are comments such as the high-like channels are stuck, the hot list partitions are cancelled, one's own questions cannot be deleted, and there are too many online articles.

5. Commercialization Model

1. Current revenue and loss situation

(1) Losses are still increasing

The financial report shows that in Q3 2021, revenue reached 823.5 million yuan, a year-on-year increase of 115.1%; gross profit was 424.8 million yuan, and gross profit margin was 51.6%, a year-on-year increase of 93%; the average monthly active users (MAU) was 101.2 million, a year-on-year increase of 40.1%; the average monthly number of paying members was 5.5 million, a year-on-year increase of 109.9%. The adjusted net loss narrowed from RMB 200 million in the second quarter to RMB 112.4 million. The net loss narrowed from the previous quarter, but increased by 41.9% year-on-year from RMB 79.2 million in the same period last year. The main sources of income include online advertising, commercial content solutions, paid memberships and other businesses (including online education and e-commerce).

(2) Increased costs

In Q3 2021, Zhihu's main business costs increased from 163 million yuan in the same period last year to 399 million yuan, a huge increase of 144.79%, mainly due to the increase in Zhihu's advertising services and content-related costs, as well as the increase in cloud service and bandwidth costs caused by the rapid growth of users.

2. E-commerce

(1) Continue to increase investment in e-commerce and other businesses

At the end of July 2021, three types of drip coffee were launched on Zhihu Zhiwu. Zhihu Zhiwu is positioned as Zhihu's own consumer brand. Zhihu Books sells calendars, weekly calendars, monthly calendars and other products. On October 21, Zhihu’s official account launched the “Self-operated Grass-Growing Plan”, encouraging creators to insert Zhihu’s own products in their answers and providing relevant rewards. On the eve of Double Eleven, Zhihu launched its own e-commerce business. In the "11.11 Zhihu Welfare Station" column, daily necessities, home appliances, digital products and other categories of goods are all for sale. Zhihu also launched a list of 100 highly praised products, covering various categories such as food, home furnishings, leisure and entertainment, beauty, digital 3C, etc. Professional Zhihu answerers and Zhihu users in various related fields evaluated the products through questions and answers, and scored each product together. Finally, 100 products that enhance the happiness of life were selected, expanding Zhihu's industry awareness in helping everyone make consumption decisions.

However, Zhihu's e-commerce shopping path still needs to be improved. For example, the e-commerce entrance is not clear enough, there is no shopping cart function, and there is no real-time customer service consultation on the page. (Economic Observer)

(2) It has a greater impact on users’ purchase of digital products, small household appliances, etc.

Kantar, a third-party data consulting agency, recently released the "2021-2022 Content Marketing Platform Value Insight White Paper" (hereinafter referred to as the "White Paper")
It is stated that Zhihu's influence on users stems from its answers and help for general life needs, and its multi-dimensional neutral evaluation and interpretation, which enable users to understand more and more effective life plans while browsing, thereby influencing users in the dimensions of demand germination and decision support.

The white paper also points out that 86% of users have had the experience of making the final pre-purchase confirmation for the target product, and Zhihu’s influence on pre-purchase confirmation is better than other platforms. It has a particularly significant impact on the fields of digital and small appliances, large appliances, automobiles, insurance and financial management.

3. Advertising

(1) Zhihu’s advertising revenue was achieved in an overall sluggish market and is therefore of high value.

According to media reports, ByteDance's domestic advertising revenue has stopped growing in the past six months, the advertising revenue growth rates of Tencent and Baidu have fallen to 5%, and Alibaba's advertising revenue growth rate in the latest quarter was only 3.4%. In comparison, Zhihu's online advertising business achieved a year-on-year growth of 38.9%.

(2) Zhihu Business Content Solutions - The proportion of "Zhi+" is increasing year by year

The content business solution is that Zhihu helps companies invite well-known influencers, who will write soft advertisements for the companies in the form of questions and answers. Some of them will include product links in the content, or provide companies with services such as homepage exposure. At the same time, in terms of content distribution, distribution is carried out based on user interests, topics of concern, content topic matching, etc. The distribution coverage scenarios mainly include home page recommendations, answer recommendations and search locations.

In 21Q3, the revenue from content business solutions was RMB 278 million, a year-on-year increase of 511.5% and a month-on-month increase of 34.2%, accounting for 33.8% of the total revenue, a month-on-month increase of 1.3pct. The strong year-over-year growth was mainly due to the rapid growth in subscribers and ARPU of commercial content solutions.

In Q3 2021, Zhihu launched the "Toast Platform" for selecting questions, which completed the closed loop of the entire content marketing based on the "Cheese" platform for content creation and the "Zhi+" for distribution. Specifically, in terms of question selection, the "Toast" tool can help brands select questions through algorithms and data detection. In terms of content creation, in addition to official brand creation, Zhihu has also launched the "Cheese" platform to support and discover good answerers, helping brands find suitable creators. Zhihu also encourages brands to recruit amateurs or KOCs to conduct crowd-testing and create content through various tasks. Finally, in the distribution stage, brands can make recommendations and conduct search optimization through “Zhi+”.

4. Membership

Paid membership revenue in Q3 2021 was 178.3 million yuan, a year-on-year increase of 95.8%. Zhihu has an average of 5.5 million monthly paying users, accounting for 5.43% of Zhihu’s total monthly active users of 101.2 million during the same period. Browsing user reviews, we can see that a considerable proportion of paid members come here to read online articles.
The paid content rights product matrix includes Yanxuan columns, live lectures, e-books, audio books, lectures and magazines, covering knowledge, social life, examinations, and cultural and entertainment content.

6. Existing Problems

1. Content quality declines

The quality of discussion has declined and no strong output concepts can be generated. Since Zhihu embraced algorithms in 2018, creators have tended to fit the algorithms, resulting in an increasingly higher proportion of content related to social hot spots and an increasing number of video answers (with low information content). Questions such as "What do you think about the declining quality of Zhihu content?" are heard frequently.

2. The community atmosphere deteriorates

The downward trend has changed the tone of Zhihu. Topics such as gender emotions, politics, economy, military affairs, and getting rich have become popular, and social hot spots and entertainment news are often at the top of the hot lists.

3. The separation between commercialization and product experience

From Zhihu's promotion of paid knowledge, to the revision of the homepage timeline to the current strong promotion of videos, the MAU data has been rising steadily, but it is not clear whether it has consumed the user experience. Zhihu seems to have "borrowed" hot searches from Weibo, learned how to sell products from Xiaohongshu, and used videos to compete with Bilibili. It is not clear about its future development direction.

4. Video quality is rough

A tool for converting text to video has been launched online, but it only converts text into ppt videos, which is not very watchable.

5. Conflict of interests between content creators and platforms

(1) High-quality creators’ content is not exposed

The revision of the timeline has resulted in creators’ content being unable to be displayed in users’ timelines, causing Zhihu answerers with hundreds of thousands of fans to only receive single-digit likes. Highly rated Q&A posts were directly copied to other video platforms.

(2) The income is much lower than other platforms

Taking "Half-Buddha Immortal" as an example, Tech Planet reported that he has 6.294 million fans on Bilibili, and the price for customized video advertising is 590,000; he has 1.7 million fans on WeChat public account, and the price is 170,000; he has 1.7 million fans on Zhihu, and the price is 55,000; he has 1.7 million fans on Weibo, and the price is 50,000. Zhihu ranks at the bottom, only higher than Weibo.

(3) The accumulation of fans is very slow

Wen Yifei, a famous answerer on Zhihu, started sharing content on Zhihu around 2015, but after a few years, he only has 885,000 followers. In March last year, Wen Yifei began sharing videos on Bilibili, and after releasing 10 works, he gained 230,000 followers. He was then poached by ByteDance and began to create content on Douyin. His account currently has 12 million followers.

6. Self-produced programs/IPs fail to gain popularity

In 2018, programs or peripheral products such as the Unknown Clinic, Salt Club, Salt Salon, Liu Kanshan, Craftsmen Introduction Agency, "Problematic" Theme Hotel, Zhihu Concept Store, and Zhihuzheye failed to become popular. In 2021, activities such as the "New Knowledge Youth Conference" and "Answer Adventure Night" were launched. The latter had 460 million readings on Weibo. In addition, there were few activities that went beyond the circle.

7. Stricter regulation

The policy is like a sword of Damocles hanging over Zhihu's head, and Zhihu has been summoned for talks many times recently. On December 20, the Beijing Municipal Cyberspace Administration announced that the National Cyberspace Administration of China instructed the Beijing Municipal Cyberspace Administration to interview the person in charge of Zhihu.com in accordance with the law, and ordered Zhihu.com to immediately rectify the problem of repeatedly publishing or transmitting information that is prohibited by laws and regulations.

7. Future Development

Zhihu has been moving further and further in the direction of video and commercialization. While monthly active users, revenue and other data are performing well, the departure of creators and the decline in the quality of platform content have become the most serious problems. How to ensure user experience while commercializing? Here I will explain my point of view.

1. Continue to focus on new and popular content

The platform is currently promoting hot lists and hot searches. According to user reviews on the App Store, people's dissatisfaction is more focused on advertisements (23%), too many videos (12%), the atmosphere of confrontation between men and women (10%), and hidden functions such as messages (8%), but there are not too many negative opinions about the hot lists and hot searches. The author believes that news events are natural hot spots with a wide audience and can enrich the types of content on the platform. If operated properly, they can indeed become a traffic entrance. Zhihu has a natural advantage in professional commentary on hot issues. After an event occurs, it can immediately invite experts in related fields to provide in-depth answers. Imagine if there are several events that go viral, will users list Zhihu as an option when they want to see hot searches?

2. E-commerce progress has gone one step further

The author is optimistic about the future development of "Little Blue Book". Since Zhihu has a greater influence on pre-purchase confirmation than other platforms, especially in the fields of digital small appliances, large appliances, automobiles, insurance and financial management, the revenue from e-commerce and online education accounted for only 5.5% in the third quarter of 2021, and it is more likely to make efforts in this area in the future. More obvious entrances, forming a complete purchasing link, adding shopping carts, etc. may become the iterative direction of products during this year's shopping festival.

At present, the e-commerce entrance is on the home page - Membership - Zhiwu Festival. Perhaps it is not fully prepared yet, but it is just a small trial, which makes it difficult for users to discover.

Finally, the answer to Zhihu’s big V @ Wang Ruien, who was poached and returned, ended with Zhihu’s answer under the question “How do you view the Wukong Q&A app announced to be offline?”

1. The formation of a community is accidental, and the right people, the right time, and the right content carrier are indispensable;
2. Good questions are equally important as good answers. Good answers can make people "consumer" content, while good questions can make people "produce" content. If the latter cannot be achieved, it may cost hundreds of millions more, which may not be useful;
3. Users are criticizing a community, and it must be that something is wrong with the community, but users are praising a community, so you should also be vigilant. The screen full of "good people have a safe life" is not socializing. Socializing means quarrel, conflict, and subcultural circles. Only when queuing up to receive money can all be praised, but this is not a community. ”

Author: Operational Thought Notes

Source: Operational Thought Notes