Analysis of Kuaishou’s competitors!

1. Current status of the short video industry

The short video industry has experienced explosive growth since 2016. The mobile era has accelerated the development of the short video industry. In recent years, short video platforms have continued to explore business models. On the one hand, they have become innovative new media marketing platforms. On the other hand, they have also ushered in new growth points by combining live streaming with sales. The market model of short video marketing has gradually been recognized and has become the main source of income for short video media platforms.

Data shows that the size of China's short video market reached 140.83 billion yuan in 2020.

Douyin and Kuaishou are currently the leading platforms in the short video industry, but with the development of businesses such as social networking and mobile payments, Douyin's scale advantage is gradually surpassing Kuaishou. A survey on the products most commonly used by short video users showed that Douyin ranked first with a share of 70.9%, and Kuaishou accounted for 52.3%.

In the face of competition, Kuaishou actively seeks capitalization, but its rapid revenue growth is accompanied by continued expansion of losses. High income comes at high costs, and its commercial conversion capabilities have not improved significantly. In the long run, this development model poses risks.

Douyin and Kuaishou have obvious advantages in the field of short videos. Kuaishou started early, has a strong user base, and is actively developing businesses such as e-commerce and game live streaming, making it a typical representative of the top players. Although Douyin has a shorter development time, it has a clear momentum of catching up, has a large number of KOLs, and has a good situation of promoting products, making it the short video platform with the most users.

The data shows that among the short video platforms most frequently used by the respondents, Douyin ranks first with a share of 45.2%, while Kuaishou and Bilibili account for 17.9% and 13.0% respectively, ranking second and third.

Other ByteDance short video products such as Xigua Video and Douyin Volcano Edition also accounted for 4.3% and 1.6% respectively. Douyin has successfully captured the favor of users by virtue of its advantageous content distribution mechanism, becoming the most commonly used short video application by users; at the same time, Kuaishou has low user stickiness, and is gradually being left behind by Douyin and being chased by other platforms.

1. Political factors

In August 2014, the central government arranged and deployed new measures, announced the vigorous implementation of the innovation-driven development strategy, and actively promoted the digitalization, networking and intelligent development of traditional media. In 2016, in order to implement the central government's deployment, various innovative short video apps were launched, and the short video format has attracted more and more attention from media and creators. This undoubtedly provides a huge market development space for the short video app market.

2. Economic environment

The rapid spread of short videos has led to a rapid expansion of its market size. While major short videos are creating huge traffic, their market size is also growing rapidly. According to data from the China Internet Audiovisual Program Service Association, the market size of my country's short video industry reached 46.71 billion yuan in 2018, an increase of 744.7% from 5.53 billion yuan in 2017.

Data shows that the size of China's short video market reached 140.83 billion yuan in 2020, continuing its high growth trend, and is expected to reach nearly 200 billion yuan in 2021. In recent years, short video platforms have been constantly exploring business models. On the one hand, they have become innovative new media marketing platforms. On the other hand, they have also ushered in new growth points by combining live streaming with sales. The market will continue to develop further.

3. Cultural environment

As of the end of December 2018, the scale of short video users in my country reached 648 million, a year-on-year increase of 58.05%, 36 million more than the number of long video users, and the usage rate of netizens reached 78.2%; in June 2019, the user scale of China's short video industry reached 857 million people.

At the same time, the usage time of short video users accounts for 11.4% of the total Internet time, exceeding comprehensive video (8.3%) and becoming the second largest application type after instant messaging.

In 2020, the total monthly usage time of short videos increased by 1.7 times year-on-year, surpassing online videos and becoming the second largest industry after instant messaging. Of the total increase in mobile Internet usage time, short videos accounted for 33.1%, instant messaging accounted for 18.6%, and comprehensive information accounted for 9.7%. In 2020, the number exceeded 700 million, and is expected to increase to 809 million in 2021.

4. Scientific and technological support

• The popularization of smart phones and the optimization of the network environment have improved the smooth experience of short video users, becoming the direct driving force for the growth of the number of short video users.
• The application of technologies such as face recognition and AR in short videos has improved the richness and fun of the short video user experience, thereby increasing user usage time and strengthening user stickiness.
• Big data, image recognition and other technologies are driving the refinement of content data and user data, thereby enabling accurate matching of content and users, providing users with a personalized experience in short video content and increasing user loyalty.

2. Competitive Product Analysis

1. Basic Information

2. Product iteration

From the historical iterations of the above two products, we can see that the functions of both sides are becoming more and more similar, which is also derived from the improvement of user experience and market changes:

Douyin: It can be clearly seen that Douyin's updates focus on user experience and updating social attributes. In addition to optimizing products and fixing problems, it has repeatedly launched a large number of new special effects, props, filters and activities, and provided tools to assist in content production, greatly improving its creativity, convenience, entertainment and users' motivation to produce content.

In addition, the “Friends” section of Douyin has added new social attributes to the product, diversifying its positioning so that it is not limited to a single short video function, and also increasing the possibility of users using the product. In the era of Internet+ and big data, Tik Tok has also been constantly updating its algorithms and launching smart search and discovery optimization based on users' daily experiences.

Kuaishou: Due to different product positioning, Kuaishou did not update as many filters, props and other functions as Douyin. Most of the product update logs are about "bug fixes and performance improvements" and "optimizing user experience".

Version 8.0.0 is the most critical product update of Kuaishou. It adds "multi-entry content", "immersive up and down sliding experience" and "waterfall flow". After this update, the average daily app usage time of Kuaishou users has increased by 30%. In subsequent updates, the up and down sliding experience was also applied to the discovery page and the same city page, aiming to retain users, gain user usage time, and develop new users.

3. Product Users

1) Geographical distribution of users

Tik Tok:

source: Baidu Index

quick worker:

source: Baidu Index

Data shows that the users of the two products are mainly distributed in East China and South China, showing a trend of spreading from east to west, from south to north, and from coastal areas to inland areas.

This is largely because the rapid economic development, fast pace of life and high work pressure in coastal areas make their residents prone to anxiety, irritability, emptiness and other phenomena. The emergence of short videos that express a relaxed, funny and beautiful image can give them a short period of relaxation and partially release their mental stress, which greatly prompts them to use short video apps more frequently.

Although the geographical distribution of users of the two products is very different, there are still certain differences: compared with Douyin, a large proportion of Kuaishou's users are from the north, such as Shandong, Hebei and other places.

Tik Tok, on the other hand, is more inclined towards southern users, mainly because of the fit between user personality and product positioning. Northerners are generous and loyal, and prefer things that are more practical. They like to express truth, goodness and beauty in a down-to-earth way. Southerners pursue a refined and beautiful life. Differentiation determines that the two products are suitable for different groups of people.

2) Age and gender distribution

Tik Tok:

source: Baidu Index

quick worker:

source: Baidu Index

Data shows that both products have obvious youthful characteristics, and the user population is mainly distributed between 20 and 39 years old. This group is mainly born in the 1990s and 2000s. They are free individuals with new ideas who grew up in the new society. They have a strong ability to accept new things and are creative. They can quickly obtain, replace and disseminate information.

From a growth perspective, this group of people are also in a stage of hard work in life. They are under relatively high pressure and are more likely to develop an anxious psychological state. Short videos can temporarily reduce their anxiety to a certain extent, enrich their lives, and meet their needs to learn about hot information without leaving home. This group of people is gradually moving to the center of the social and economic stage, which objectively facilitates the development of business models such as Douyin live streaming.

3) User interests

Tik Tok:

source: Baidu Index

quick worker:

source: Baidu Index

It can be seen that the users of the two products have basically the same interests and hobbies. The video playback volume of film, television, music, software applications, and information is relatively high, and the proportion of other categories is also relatively stable. Film, television and music have always been in a leading position.

Among them, the proportion of medical and health care has the largest growth rate, which is directly related to the COVID-19 epidemic in recent years. Also due to the improvement of living standards and the advancement of concepts, people are more concerned about their physical and mental health.

In general, the user gap between the two products is gradually narrowing.

Douyin: The initial target users were young people who were trendy and cool. The platform's initial content operations were oriented towards fashion, attracting young people from colleges and universities to create. The earliest sponsored variety shows were "The Rap of China" and other programs with "trend" as their characteristics. Young fashionable people in first- and second-tier cities were the seed users of Douyin. Later, as the number of users grew, the platform's content gradually became richer, and the user groups (covered areas, age distribution) were more evenly distributed.

Kuaishou: Kuaishou did not deliberately engage in content guidance at first, but its inclusive traffic distribution method was extremely attractive to users in the lower-tier markets who lacked targeted social and entertainment products at the time. Therefore, Kuaishou's seed users were composed of users in the lower-tier markets (especially in the northern region). However, due to Kuaishou’s subsequent breakthroughs in vertical fields, Kuaishou’s current user structure is more balanced than before.

4. Comparison of main product functions

Left: Douyin Right: Kuaishou

After Kuaishou version 8.0.0, the homepage video also adopted an immersive up and down sliding mode, which was also borrowed from the homepage of Douyin. It can provide users with a short video experience more quickly and directly, and it is also easier to retain users.

The way to like is to double-click or click the icon.

In addition to the recommendation list, the main page of Douyin also has "Friends" and "Nearby", while Kuaishou puts the "Nearby" module in the title bar at the bottom.

Douyin has an exclusive live broadcast channel in the upper left corner; Kuaishou has placed the entrance to the personal center, and the live broadcast entrance is placed on the new page.

When the comments on Douyin are expanded, the video playback interface remains the same, and part of the video will be blocked by the comments; while on Kuaishou, after the comments are opened, the playback interface will be reduced as a whole to above the comments. Although it will not block the video, the viewing effect may not be ideal because it is too small.

Swiping left on the playback interface of Douyin will take you directly to the author's homepage to view detailed information, while Kuaishou will pull out a list of the author's other works. If you want to enter the author's homepage, you need to click on the avatar to enter.

The follow icon will also be displayed on the pop-up page, but the TikTok icon is more eye-catching.

The Douyin search interface has a ranking list that allows you to directly view hot topics and easily access fashion information; while Kuaishou places various classification items, which is more life-oriented.

The Douyin search bar has a scan function, and its thinking logic is suitable for many apps on the market, making it easy for users to adapt.

In the latest version of Douyin, a "Learning" column has been added to the "Nearby" column, and the two can be switched; Nearby City has also added data detection and functions similar to "Friends Circle"; Kuaishou has added the "Alumni" gameplay in the same city, greatly increasing its social attributes.

Douyin has classified four basic notifications in the "Message" interface: new fans, interactive messages, system messages and private messages. "People you may know" are classified into "Fans"; Kuaishou directly recommends people you may know in the "Message" interface.

Douyin group chat is classified as "Message"; Kuaishou puts group chat on personal homepage.

Douyin’s library of auxiliary shooting tools (filters, special effects, etc.) is much larger than that of Kuaishou, and the gameplay is more diverse.

In general, in terms of browsing methods, Kuaishou has borrowed the "immersive" up and down sliding mode of Douyin, but still retains some of its own features. However, from the author's experience, Kuaishou, which is known for its simplicity and convenience, has become more and more redundant:

• During the experience, the small interface of new works and the shrinking interface of comments and playback were too small to be viewed well.
• The live broadcast entrance cannot be entered directly and requires multiple clicks, which is not very convenient.
• The message interface is too complicated

3. Profitability

Consumers put forward demands, and producers develop, improve, and update products based on these demands. Products must bring profits to creators while satisfying consumer demands in order to form a complete closed loop. The quality of the product determines the profit it can bring, and the profit in turn directly determines the direction of the product.

Download volume comparison:

source: Qimai Data

Data shows that from November last year to October this year, although the number of downloads of Douyin fluctuated, it has always been ahead of that of Kuaishou, averaging around 180,000, while Kuaishou has remained at around 100,000 with little fluctuation.

Income comparison:

source: Qimai Data

It can be clearly seen that Douyin's revenue is almost 3 to 4 times that of Kuaishou, and the revenue of short video platforms mainly comes from three aspects: advertising revenue, live broadcast reward revenue and e-commerce sharing revenue. Among them, the revenue from advertising and live broadcast reward accounts for 89% of the total revenue. The profit model and revenue structure are different: Douyin focuses on advertising VS Kuaishou focuses on live broadcast, which also reflects its commercial monetization maturity, but the disadvantage of insufficient diversification.

1. Advertising monetization

Advertising accounts for 80% of Douyin’s revenue: Douyin’s centralized distribution mechanism makes it particularly easy to create popular products and to gather traffic to build reputation, so advertising has a great advantage. The advertising profit model has a large profit margin, so 80% of Douyin’s revenue comes from advertising.

Distribution ratio of Douyin’s income sources

2. Live broadcast rewards

Kuaishou’s live streaming revenue accounts for 60% of its total revenue: Kuaishou advocates fan economy and community culture, which creates a strong bond between KOLs and their fans. As a result, the profit margin for live streaming appears to be very large. Although the profit is not as high as that from advertising revenue, the income is stable and is also Kuaishou’s main profit-making method.

Kuaishou’s income source distribution ratio

3. E-commerce revenue sharing

There are three main operating models in the short video e-commerce industry:

1. E-commerce platforms recommend products to short video platforms, and content producers such as product short video columns begin to make efforts.
2. E-commerce platforms and short video platforms cooperate to drive traffic to e-commerce platforms.
3. A comprehensive vertical short video platform that integrates content distribution and purchasing.

1) Product e-commerce development history

Tik Tok:

quick worker:

It can be seen that Douyin started laying the foundation for e-commerce business earlier than Kuaishou, and its subsequent product launches, function improvements and replacements, iterative upgrades and marketing were more frequent and more complete. This is also because Douyin has fully utilized the role of big data and large traffic.

In October 2020, Douyin achieved a complete closed loop of its e-commerce business, which also laid the foundation for Douyin to surpass Kuaishou in e-commerce business.

2) Service positioning

3) Specific analysis

Production Group:

Kuaishou: top anchors, anchor experts who are proficient in e-commerce, guilds, and offline individual sellers, etc.

Most of these e-commerce experts on Kuaishou have one thing in common: the number of their fans ranges from tens to millions, some of them have certain experience in selling goods, and many of them are even small and medium-sized Taobao stores that have settled in Kuaishou. Compared with top internet celebrities, they are significantly more professional in live broadcast presentations, sales skills, and transaction promotion.

Tik Tok: Mainly internet celebrities. Offline merchants are supplementary.

Currently, the main sellers of goods on Douyin are still internet celebrities. According to relevant data, the way that Douyin influencers and internet celebrities sell goods is mainly to shoot short videos, and put links to the same clothes in the videos so that customers can buy while watching, but this also places high demands on the content quality of the videos.

Product Type:

Kuaishou: There are various types of products, including daily necessities, cosmetics, clothes, food, etc.

The products sold by Kuaishou anchors, users and even merchants are diverse, and the attributes of the products on the shelves coincide with Kuaishou’s product positioning and its user attributes.

Douyin: It focuses on "tone", and the most common type of products is clothes, and they are trendy outfits.

Tik Tok still pays great attention to "tone". Relevant reports show that the most sold items on Douyin at present are clothes. Moreover, with trendy outfits and videos of good-looking men and beautiful women promoting the products, users can easily be attracted to the products and then buy them. At the same time, users are stimulated to place orders through subsidies and coupons.

From a big picture perspective, the sales model of the two products is based on their market positioning: Kuaishou users purchase goods more likely out of their love and trust in the anchor, that is, trust in e-commerce; while Douyin users purchase goods often because the content of the video is high enough, that is, interest-based e-commerce.

IV. Summary and Suggestions

In general, TikTok focuses on analysis and decentralized content distribution. Douyin has signed a number of internet celebrities and experts in content production, and through MCN agencies, it has continuously and steadily output high-quality content. PGC has a wide coverage, but how to ensure that ordinary users do not lose the enthusiasm for producing content independently and create a system that perfectly combines PGC+UGC.

Kuaishou’s content distribution is decentralized, focusing on the UGC productivity of ordinary users and light on operations. Kuaishou benefits from the sinking users in third- and fifth-tier cities. These users lack opportunities to express themselves in life, but have the desire to express themselves, thus becoming the main force of Kuaishou's content production.

Since the main force of current Internet users are still those born in the 1990s and 2000s, their youthful, bold and lively personality fits Douyin's product positioning. Coupled with its operational strength, mature system and complete industrial chain, Douyin has firmly established itself as the "number one" in short videos with the support of big data and large traffic base.

suggestion :

1. Focus on content attributes, whether it is Douyin or Kuaishou, whether it is the quality of the video content itself or the quality of the product. Although the industry is extremely popular with the support of big IPs, in the long run, only products with high-quality attributes can gain user recognition;
2. There will definitely be new developments in e-commerce business in the future. Douyin already has a more complete closed loop of the industrial chain, and Kuaishou should speed up the construction of a complete system;
3. The short video industry is highly competitive, and many value-added services have emerged in the continuous iteration, but they should be simplified and considered from the perspective of user practicality and convenience, so that the product can maintain a continuous and stable connection with users;
4. Tik Tok should promote the creativity of ordinary users, support the production of UGC content, and avoid serious homogeneity of content.

References:

• iiMedia Consulting | 2020-2021 China Short Video Market Competition Status Research Report: https://www.iimedia.cn/c400/76654.html
• Douyin analysis report: How does Douyin meet the needs of different users after its explosion in popularity? : http://www.woshipm.com/evaluating/1552722.html
• Competitive analysis: Douyin VS Kuaishou, how does Douyin overtake others in e-commerce business? : http://www.woshipm.com/evaluating/4703148.html

Author: Ryan_

Source: Ryan_