Competitive product analysis report: Bilibili VS A-station & TikTok

This article is a competitive product analysis report of Bilibili, focusing on video function analysis and strategic positioning. Welcome to read.

01 Industry status and trend analysis

1.1 Recent environment (recent market background)

The PEST analysis model is used to analyze the product’s recent market background and the company’s macro environment.

1.1.1 Politics

Under the current political situation, government departments have made great efforts to promote positive content that is beneficial to national development. There is an urgent desire to publicize the upcoming 70th anniversary of the founding of the People's Republic of China, and to broadcast patriotic and party-loving propaganda videos and related copywriting content on various mainstream video platforms.

In the recent special campaign to crack down on gangsters and eliminate evil, the government is willing to use various video platforms to publicize and display the interim results, so as to create a good image of domestic security and welcome the 70th anniversary of the founding of the PRC with a new look: a series of policies will help video platforms such as Bilibili that participate in the publicity to establish their own corporate website image and win some political trust from the government and users.

It is valuable for political propaganda and can avoid small public opinion storms. Bilibili established the Bilibili Party Committee on July 2, 2019: to be the disseminator of the main theme and the promoter of excellent culture among young people.

1.1.2 Policy

On January 9, 2019, the China Network Audiovisual Program Service Association officially released the "Detailed Rules for Online Short Video Content Review Standards" and the "Online Short Video Platform Management Standards" - based on the basic standards for online short video content review, short video programs broadcast on the Internet, and their titles, names, comments, barrages, emoticons, etc., must not contain the following specific content in their language, performances, subtitles, and backgrounds (Twenty-one Frequently Asked Questions).

1. Content that attacks my country’s political and legal systems

(2) Content that splits the country https://www.sohu.com/a/288426621_187461

On the one hand, this policy helps video platforms quickly establish a reliable and complete video supervision system, while on the other hand, it increases corporate operating costs.

1.1.3 Economy

China's GDP grew by 4% year-on-year in the first quarter of 2019, and is expected to grow by 6.3% in the second quarter of 2019. The overall economy remained stable, with little impact from the trade war, and was not reflected in indicators such as employment and people's livelihood. The domestic economic environment is running smoothly, and the user groups watching aggregated video platforms are not affected by economic fluctuations;

The Internet industry is showing a steady downward trend, and the layoffs that began at the end of 2018 have not stopped. After the dividend of China's Internet population base has gradually decreased, venture capital funds have begun to shift their investment direction, which has a significant impact on the financing and risk resistance of short video and aggregated video platforms and is continuous.

1.1.4 Society

Young people in today's society (aged 18 to 30) have mixed opinions about Bilibili (from the perspective of viewing volume, the positives outweigh the negatives):

• Praise: On the one hand, this type of platform provides a fast and entertaining way to relax online, and on the other hand, UGC shares various learning resources, which increases the tool nature of the platform, increases the irreplaceability of the platform, and enhances the positive image of the enterprise (mainly entertainment but not limited to entertainment);
• Derogatory: The ghost-like spoof of the popular young actor Cai Xukun caused B station to receive a lawyer's letter storm. (The article ends with People's Daily praising Bilibili for developing a learning video platform. Original text: Quite a number of students study on Bilibili.)

1.1.5 Technology

AI technology and Internet AI algorithms are constantly improving, and as a result, the phenomenal application TikTok, which has become popular for its personalized video recommendations based on algorithms, has emerged. This has strengthened the confidence of various video platforms in gaining new growth points by optimizing algorithms.

VRAR technology upgrades and scene applications have always been the focus of international attention. Well-known platforms such as YOUTUBE are also looking for landing scenarios, increasing the diversity of video types, and enhancing user viewing experience.

1.2 Industry Status

ACfun went through one strategic investment and four rounds of financing from 2014 to 2016, and was finally acquired by Kuaishou in June 2018. Until mid-2019, the market share of vertical videos has not increased and has shown a continuous downward trend.

In contrast to the situation of Station A, Bilibili (hereinafter referred to as Station B) received its first investment of US$18 million in January 2015, including investment from the famous technology venture capital fund IDG, which brought great capital attention to Station B. In July of the same year, it received direct investment from Tencent, and maintained a financing momentum of one round per year, strengthening its strategic financing relationship with Tencent and officially becoming a Tencent-affiliated company.

On March 29, 2018, Bilibili was listed on NASDAQ and in February 2019, it received strategic investment from Alibaba. Alibaba and Tencent's joint investment in Bilibili shows that the capital market basically recognizes Bilibili's current dominance in the vertical video field and that the trend of dominance will not change in the future. (After several reports of Alibaba investing in ACFUN, it finally gave up on Station A).

The current industry landscape is that Bilibili is the only dominant player, with a vertical video market share of 74% (see the figure below for app penetration rate).

In addition to vertical fields, Douyin and Xigua Short Video are participating in cross-field competition with Bilibili in the form of UGC short videos and VLOG (UGC long videos). (The proportion of overlapping users is shown below)

Market size: According to Bilibili’s latest financial report on May 14, 2019, as of the first quarter of 2019, its average monthly active users exceeded 100 million, a year-on-year increase of 31%.

1.3 Trend Analysis

Direct competitor ACFUN (hereinafter referred to as A Station), continued to maintain its original ACG content after being acquired by Kuaishou due to poor management; but because of the obvious Matthew effect of B Station, a large amount of A Station's UGC content was attracted to B Station, and Kuaishou did not indicate further integration strategy. Currently, A Station has begun to show a trend of becoming a small ACG forum.

Bilibili's indirect rival Douyin's VLOG and UGC model exploration progress has not accelerated. Bilibili still maintains its advantage in this regard and the UGC content of the two video platforms shows commonality. KOLs publish the same content on both platforms at the same time. Therefore, Bilibili currently has no plans to take countermeasures, but does not rule out the possibility of an exclusive KOL agreement in the future.

02 Comparative analysis of competitor background

2.1 Select Competitors

Core competitors: Station A is a first-tier competitor in the market directly related to Station B’s products (with the same ACG vertical video model);

Important competitors: The short video platform Douyin ranks first in the market indirectly related to the product (Qimai data shows that the search index of Douyin in the APPSTORE large video product category is 11229, and the search index of Bilibili in the same period is 8958).

2.2 Competitive Product Background

2.2.1 Resource Background

AcFUN was acquired by Kuaishou, whose parent company is Beijing Kuaishou Technology Co., Ltd.

• Registered capital: RMB 100 million;
• Financing overview: Series E and later;

In 2018, Kuaishou’s revenue was nearly 20 billion yuan, achieving break-even; the target revenue for 2019 is 30 billion yuan. 2018 China Internet Enterprise Value List: Kuaishou’s valuation reached 120 billion yuan, with a growth rate of 500%.

After receiving several rounds of financing from Tencent and strategic investment from Alibaba, Bilibili was listed on the Nasdaq with a total market value of 5.169 billion yuan on July 10, 2019.

TikTok's parent company ByteDance plans an IPO in 2019 with a valuation of up to $75 billion.

2.2.2 Team Background

(1) Station A team

Sun Min, formerly the CEO of A站, is currently the president of A站, responsible for the commercialization part.

In January 2016, Station A officially announced the completion of a RMB 60 million A+ round of financing, with SoftBank China as the investor. At the same time as the financing was completed, Station A also replaced its CEO, and Mo Ran took office. After Mo Ran was appointed as CEO, Station A's former CEO Sun Min took over as president, mainly responsible for interactive entertainment, that is, the commercial part.

Liu FangyangCOO

AcFun Danmu Video Network recently announced that Liu Fangyang will serve as AcFun's Chief Operating Officer, responsible for the overall operation and management of the website. It is understood that Liu Fangyang is also the first COO of AcFun, and this position has been vacant before.

According to information, Liu Fangyang joined AcFun in February 2015 as general manager of corporate operations. After Youku Tudou invested in A站, Liu Fangyang took over the business operations and investment management of A站.

(2) Bilibili Team

Xu Yi, founder of Bilibili and founder of Bilibili. He founded MikuFans, the predecessor of Bilibili, in 2009 and has served as a director and president of Bilibili since December 2013. He is currently the general manager of Enjoy Network.

Background information of Bilibili CEO and Chairman: Chen Rui was born in Chengdu in 1978. He is currently the chairman of Bilibili, the largest youth trend culture and entertainment community in China. He was also the co-founder of Cheetah Mobile Inc.

Vice President and COO Li Ni.

2.2.3 Personnel composition

In addition to regular positions, special positions at Station A and Station B include: anchor operations director, Unity special effects artist, 2D animator, concert producer, comic business, new media operations (events and exhibitions), senior marketing planning specialist (games), game public relations, game project management, Cocos2d-x development engineer, Japan business, overseas distribution director, KOL business operations (ghost animal area), KOL advertising planning director, and up main operations (animation direction).

2.2.4 Organizational Structure

Not found.

2.2.5 Company Vision

The vision of Station A is to share the high-quality user resources of Generation Z with Station B. After being acquired by Kuaishou, it introduced new video technology and operation models, and announced that it will continue to subsidize and cultivate Up masters in the future. With the support of Kuaishou's funds and technology, there is a possibility of turning losses into profits in the future.

Summary of Bilibili's vision: The Z generation user group with great consumption potential will lay a solid foundation for the future development of Bilibili's PUGV, games, Chinese comics, Japanese animation, documentaries, film and television and other fields.

Vision of Douyin: Under the current circumstances where the two parties do not interfere with each other and their user groups do not have a high degree of overlap, Douyin’s newly launched VLOG PUGV development direction will inevitably create a competitive relationship with Bilibili. (It is possible that the author’s sharing platform will be restricted to Tik Tok.)

2.2.6 Cost composition

• B station's depreciation and amortization in 2018 was 642.4 million.
• Research and development expenses: 537.5 million,
• Marketing: 585.8 million,
• General and administrative expenses: $461.2 million.

03 Comparative analysis of competitive product positioning

3.1 Product Positioning

The positioning of Station A and Station B is similar. In specific comparison, there is only a small overlap between Douyin and Station B, and the positioning will be described in the final summary.

3.1.1 Same positioning

1. The initial positioning of AB Station was to be a two-dimensional vertical community. In the ACGN cultural circle, "two-dimensional" is used to refer to the virtual world. Today's AB Station is a comprehensive video barrage community and two-dimensional community targeting fans of general two-dimensional culture.
2. AB target market positioning: China's Generation Z. (Site A is more inclined towards veteran ACG players, while Site B users cover a wider range of Generation Z groups.)
3. AB product demand positioning: Meet the cultural needs of Generation Z. That is: to meet the cultural needs of young people.

3.1.2 Product Differentiation Value Positioning

1. The feature of Station A is the article section, which includes social news in addition to ACGN content; the feature of Station B is the official PUGC documentaries, film and television copyrights, and mobile games. The entertainment, cute pets and technology section has a rapid growth trend due to the high-quality UGC content of UP hosts.
2. Generally speaking, Station A is more niche and professional, and the overall functions and value of Station B are gradually showing a trend of encompassing Station A. Tik Tok continues to focus on short videos and has added a new vlogUGC plan. The user positioning is national level, user positioning: Douyin>Bilibili≥A站.
3. Layout situation: Station A continues to delve into ACGN and article communities; Station B allows UGC to develop freely and is not limited to the two-dimensional ACGN field. In addition, Bilibili is planning to develop modules such as documentaries, film and television copyrights, and the latest interactive videos have also been launched.

Both stations AB began to subsidize UP hosts' UGC content at the same time.

3.2 Target User Comparison

3.2.1 From the perspective of age distribution

Users under the age of 24 on AB Station account for more than half of the total number of platform users, and Generation Z people aged 0 to 35 account for more than 85%. This is roughly consistent with the product user positioning of AB Station;

Douyin continues to maintain its national-level characteristics with relatively balanced indicators for various groups, but users under the age of 35 still account for 75%, which is related to the fact that Douyin's UGC content guidance tends to be more technical and youthful at the beginning.

3.2.2 From the perspective of gender distribution

Because the user group is large, the gender ratio is relatively balanced. There are slightly more males than females. First, it is consistent with the characteristics of China's young population, where there are more men than women. The second is the rise of the technology section of Bilibili. The number of views of a single video of UP host He Tongxue exceeded 1,000, attracting some male people in the technology circle outside of Bilibili.

3.2.3 User Profile

Tian Lin, male, 20 years old, sophomore.

A native of a first-tier city, he uses Apple's latest iPhonexsmax (512G), has been exposed to Japanese anime and technology products since childhood, grew up with computers, and got his first Samsung smartphone in junior high school.

She is generous and not introverted, and loves to share and communicate. She often lies in her bedroom, using WIFI to watch ghost videos on the barrage video platform and laughs loudly.

He knows every review of new technology products by heart and makes jokes with netizens in the barrage.

After watching the documentary "A String of Life", I silently typed an interactive comment: "Thank you for the hospitality! One by one!" Occasionally, I would turn off my phone and continue eating and studying in the school cafeteria and dormitory because the Internet speed was too poor.

04 Comparative analysis of competing products

4.1 Core Functions

4.1.1 AB station functional architecture mind map

4.1.2 Core Function Flowchart

Since the purpose of this competitive product analysis is to compare the advantages and disadvantages of the main functions in order to find new growth points, niche functions are omitted and only the video playback function process is compared. (Involving two sections: Popular and Recommended)

4.1.3 Analysis of core functional processes

(1) Comparative summary:

1. After users enter the APP, Station A will prioritize displaying selected videos UGC (equivalent to the popular video section of Station B). This functional design takes into account that newcomers have just joined Station A and there is not enough time to collect their viewing preferences, so it is impossible to use algorithms to recommend interesting videos to them. Using popular videos that most Generation Z people like to watch as an entry point helps to capture the customer's first impression and improve the retention rate of new users.
2. On the contrary, when users are logged in, Bilibili uses recommendations as the first option, which effectively increases the activity and viewing time of old users. The disadvantage is that it is not very friendly to new registered users and visitors, which relatively increases the probability of a decline in retention rate.
3. After the full-screen playback of the video on Station A is completed, if you are not following the UP host, a follow button will automatically pop up in the center of the full screen. If you are already following the UP host, 5 sharing buttons for WeChat, Moments, QQ, QQ Space, and Weibo will appear in full screen.
4. After the full-screen playback is completed, a cancellable 6S button will appear on Bilibili to automatically play the next video. Another difference is that separate small buttons such as follow, like, favorite, and share will appear. The sharing channel will only appear after clicking the share button. At the same time, after the playback is completed, 5 to 6 related recommended videos will appear in the lower half of the screen.

In summary, Station A is more concerned about increasing the number of fans of UP hosts, which is consistent with Station A's strategy of developing ACGN UGC with UP hosts as the center and increasing subsidies to UP hosts.

The current size of Station A is smaller than that of Station B. Even its previous concept of keeping it small and beautiful has changed after being acquired by Kuaishou. In addition to competing with Station B for subsidies for UP hosts, the purpose of increasing the number of video shares is also very obvious. However, Station B's strategy of integrating all UP attention and video evaluation incentive sharing buttons on one page at the end of the video playback page has better increased the number of fans of excellent UP hosts, user stickiness, and direct income from likes and incentives, as well as indirect income (likes feed back to views and popularity).

After finishing watching and exiting the video page, Station A will directly display other videos of the UP host. After watching a video, Bilibili will recommend related videos. After clicking the upper left corner to exit the previous interface, a graphic list of related recommended videos will continue to be displayed below. To exit the viewing interface, click on the UP host's avatar area again to enter the UP host's personal homepage.

Since the requirements solved by points one and two completely overlap, even when the interface is not slid, the number of videos displayed will be more when the video is finished (it is more convenient for users to select videos). Here we can learn from Station A and make improvements by changing the area in the picture below to the UP host’s personal popular videos to avoid wasting time and again on the interface that solves the same need.

(2) Special circumstances:

When a user clicks on a recommended video with low popularity and few comments, he or she will immediately click "dislike" after watching the beginning and find that it does not meet their expectations. However, the recommendation mechanism of the B station's backend system will no longer recommend similar videos. There is a design bug that can be optimized. The special thing about Bilibili is that it is a barrage video platform. The barrage masters who are talented in video matching and good at making memes can often make an ugly video become very popular.

Therefore, if some users click "dislike" or cancel viewing within 10 seconds of watching a video, it is recommended to wait until the popularity of the video and the number of barrages soar before pushing it again. Videos like those of the Huanong Brothers are no more interesting when we are in the video and communicating with them face to face than when we watch the video with the comments. For example, some famous memes from barrage masters such as "beautiful warning" have invisibly added interest to boring videos.

(3) Questions and suggestions:

Video playback ended because it auto-played too fast. The same person conducted five experiments over five days. When he was immersed in watching a video and wanted to choose the next recommended video, three times the video started playing automatically before he could make his choice.

What users really want: longer autoplay time so that there is more time to select videos.

User’s real needs: It takes too long to select recommended videos and it is difficult to make a decision.

Required solution:

1. Provide fewer options (e.g. 2 to 3). If users are not satisfied or do not like the videos, guide them to return to the previous level or go to the UP host’s personal video page to carefully select.
2. Add interactive design: When the blue arrow slides left or right as shown below, the automatic play countdown will be stopped
3. After clicking the cancel 6S autoplay button, the autoplay will not appear until the app is restarted.

4.2 User Experience

4.2.1 Interactive Experience

The yellow sliding method in the red frame area in the picture below the video playback page cannot trigger the interaction of returning to the previous page. Only sliding along the edge of the screen can trigger interaction.

4.2.2 Visual Representation

Color matching: The overall color matching is fashionable and youthful. The disadvantage is that after 10 o'clock in the evening, the overall brightness is high and the white part is more dazzling. It is recommended to set a timed night mode.

4.2.3 Fonts

The number of views on the video recommendation cover is not obvious enough. Since Bilibili places videos at the top based on the number of likes and the popularity of the section, users have to spend more time looking for videos they may like. It is recommended to use bold and enlarged colors or use a gradient from dark to light colors to show the heat. For example, 110,000 views, 220,000 views, and 330,000 views.

4.3 Features

The featured areas of Bilibili are recently reflected in its self-produced and PUGC documentary sections. It gives Bilibili users a higher quality viewing experience. In particular, the harmony of barrage interaction has reached a higher level.

For example, the documentary "A String of Life" ends with "Thank you for your hospitality". This type of barrage indirectly strengthens the barrage culture of Bilibili. At the same time, documentaries on Bilibili are showing a trend of high quality and high traffic. "A String of Life 2" has 1.749 million followers, 18.66 million views, and 1.752 million likes

05 Conclusion

There is a comprehensive competitive relationship between Station A and Station B, but Station B has all the basic functional points of Station A, and has done more in details and is more in line with its own strategic development direction. However, it still needs to better meet users' needs in details and interactions in order to continue to maintain its own advantages.

After being acquired by Kuaishou, Station A strategically began to share technology and UGC content with Kuaishou. The program Tuwei 101 was born under such circumstances, but judging from the data of the month when this competitive product analysis report was written, its popularity is still not as high as other sections of Station A. On the contrary, it is possible that Station A will be labeled as a tacky platform, just like Kuaishou back then, which has not yet completely gotten rid of its negative image.

Therefore, for Bilibili, every time a new homepage section is added, it needs to consider whether it is in line with the operating strategy of its own platform. It cannot just put it online by analyzing its current popularity and potential popularity.

From the perspective of brand strategy and product positioning, Bilibili should keep PUGC on the high-end route and produce more high-quality American cartoons and documentaries to occupy the aesthetic high ground of Generation Z. There is no sinking market for Generation Z. This part of the population has a high level of aesthetics. The popularity of earthy videos is only caused by the fact that everyone knows that they are earthy and then uses them to have fun.

In addition to its more complete and sophisticated functions, the advantages of B Station itself include higher quality UGC content and wider coverage of categories, which are also the main focus of future growth. For example, Mr. He in the technology circle, Huahua and CatLive in the cute pet circle are also very promising in their respective fields. This is also the winner-takes-all effect of the top UP hosts brought about by B Station's victory over A Station for a period of time;

Another advantage of Bilibili is that it is more influential in guiding users to start paying for premium membership. For example, using the self-made PUGC documentary "A String of Life" to strengthen the guidance of premium membership payment will bring more benefits to membership income, thereby effectively reducing B station's dependence on game income, increasing the stability of platform revenue, and promoting the positive development of stock price-earnings ratio;

Regarding the VLOG plan promoted by its indirect competitor, the Tik Tok short video APP, Bilibili will implement a close-combat strategy, cooperating with the authors of Tik Tok's excellent PUGC Vlog videos and encouraging them to join the ranks of Bilibili UP masters. It can also use this to reduce the dimension and strike at the overly professional and niche ACGN and other content of Bilibili.

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Author: Vincent

Source: Vincent