the revenue of Kuaishou Technology narrowly beat estimates as China’s No. 2 short video platform defied a weakening economy and competition from TikTok’s owner ByteDance Ltd.
Revenue rose to 21.07 billion yuan ($3.16 billion) in the three months ended in March, from 20.6 billion yuan analysts projected. Growth has slowed to the slowest pace since the company went public in February last year. The net loss was 6.25 billion yuan, compared to the estimated loss of 6.4 billion yuan.
China’s biggest tech corporations find themselves in a new era of cautious expansion, more than a year after a Beijing crackdown that engulfed the internet ecosystem, from e-commerce to gaming and social media.
Senior government officials have shown public support for digital platform companies in recent weeks, but Covid lockdowns and the country’s economic malaise have resulted in some of the tech industry’s worst quarterly earnings in more than a decade. Kuaishou is locked in a protracted duel with ByteDance, whose viral hit Douyin continues to draw users and advertisers from the wider sphere of Chinese social media.
Kuaishou has joined streaming hubs iQiyi Inc. and Bilibili Inc. and is setting clearer goals to achieve balance. Its China division is expected to become profitable sometime in 2022 based on adjusted net income, Chief Executive Cheng Yixiao said in March, boosting monetization and cutting costs.
In the wake of stricter rules on content and spending, the company is moving away from monetizing live streaming tips for more profitable businesses like e-commerce, advertising and gaming publishing. This month, it unveiled plans to provide more traffic to over 500 select merchants that will be licensed to sell products such as cosmetics and clothing under the official “Kuai” brand.
In the long term, Kuaishou is looking to replicate ByteDance’s success globally. While its two apps Kwai and Snack Video have made inroads in places like Brazil and Indonesia, they have yet to take on TikTok in big markets like the US. In March, Kuaishou’s international boss Tony Qiu left the company for personal reasons.
Translated matter from Bloomberg – Zheping Huang.
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