Now the 38-year-old businessman is on the mend. In February, Kuaishou went public in Hong Kong, raising more than $ 5 billion thanks to its burgeoning video and business operations. ByteDance, meanwhile, became entangled with the US government and then became entangled in China’s technological crackdown, probably delaying its own initial public offering.
Your not wasting a moment. Filled with cash from the IPO, Kuaishou is increasing spending to close the gap with ByteDance, more than four times its size. Kuaishou plans to expand into countries like Brazil and Indonesia, rather than TikTok’s stronghold in the US The company intends to double its global team to 2,000 by the end of the year to accelerate the launch of its international products.
Kuaishou could have an advantage over his rival in these markets. While TikTok tends to be packed with photogenic teens and dancers, Su’s stars are a diverse, sometimes low-key team of artists, often from rural regions. They include a binge-drinking farmer and a long-distance truck driver.
“TikTok is a huge leader ahead of us today globally, but there is still a lot of room for growth,” Su said in her first interview in four years. “Kuaishou’s philosophy is quite different from that of our peers, and that is based on my personal experiences and values.”
To drive Kuaishou’s expansion, the entrepreneur is implementing a proven strategy of creating the commoner’s video forum, blending AI-driven recommendations with human healing to deliver a personalized experience. His company aims to reach 250 million monthly users outside of China this year, after tripling that base in just the past six months. It has around 300 million daily users in China.
Kuaishou’s applications abroad range from Kwai to Snack Video to Zynn. Kwai, its most successful export and the international twin of its national platform, has been downloaded more than 76 million times in the first half of 2021 in countries such as Brazil and Mexico, while SnackVideo has gained a following in markets such as Indonesia and Pakistan.
Roughly half of its 150 million monthly foreign users now come from Latin America, one of TikTok’s key markets. Earlier this year, Su’s company reached an agreement to sponsor the Copa América 2021 tournament, a huge draw in the region. He also pledged to spend $ 10 million to incentivize sports content creators over the next year.
Like all Chinese tech companies, Kuaishou has additional motivation to expand abroad as Beijing cracks down on its domestic industry. Chinese authorities have targeted leaders such as Tencent Holdings Ltd and Alibaba Group Holding Ltd, but uncertainty about future regulations has led to a widespread market defeat. Kuaishou’s stock nearly quadrupled after its debut and has since fallen close to its offering price.
Su’s deputy Tony Qiu, a former Bain Capital investor and Didi executive who orchestrates the company’s overseas push, helped the Chinese passenger transport giant build its presence in Brazil. Since joining Kuaishou last August, he has been putting his knowledge of the local market to the test, leading a team with hires from Google, Netflix Inc, and TikTok. In April, Kuaishou also welcomed Wang Meihong, a former senior engineer at Facebook Inc, to oversee the technology of its global products.
“It’s not just creative minds or young, hip users who lip-sync and dance who come to our platform,” said Qiu. “Kuaishou is more universal.”
Take João Paulo Venancios, a 22-year-old Kwai creator who lives in the state of Paraíba, in northeastern Brazil. Since starting Kwai in March 2020, Venancios has earned 2.6 million followers with clips of him and his 70-year-old grandmother recreating movie scenes and everyday life. Local merchants hire him to make appearances in their stores and earn him around 6,000 Brazilian reais ($ 1,149) each month, enough to rent a house and pursue his dream of becoming a professional singer. It’s a fame he couldn’t have built on TikTok or Instagram, whose algorithms make it difficult for little-known creators to go viral.
“My grandmother is so funny and we bond,” he said. “People at Kwai find my videos easier to identify.”
Do you know the profile of JP Venancios no Kwai? Take advantage of the opportunity to confer the super funny videos that the gravel … https://t.co/RCpzz2Sl6W
– Kwai Brasil (@ KwaiBrasil2) 1626880007000
That down-to-earth nature of Kuaishou platforms reflects the humble beginnings of its founder. While Su now has a net worth of nearly $ 9 billion, she was born and raised in a small village in China’s central Hunan Province. From there, he passed the country’s grueling university entrance exam and earned entry to the prestigious Tsinghua University, where he studied software programming, before working as a developer at Google and Baidu Inc.
“As I got older, I saw more people who didn’t have a chance like me,” Su said. “So I hope that Kuaishou provides another way for them to interact with a world other than their own.”
His experience led Su into entrepreneurship: Before Kuaishou, he had dabbled in more than 30 projects in areas ranging from video advertising to mobile search to e-commerce. They all failed. Ruby Lu, a venture investor who made an early bet on Kuaishou for DCM Ventures, discovered Su’s engineering talents at that time.
“He looked like a super geek,” he said. “In my book, that’s a compliment.”
In 2013, he met fellow software engineer Cheng Yixiao over a dinner that lasted until 2 a.m. Together, they transformed Kuaishou, which Cheng launched two years earlier as a GIF maker, into a video-sharing platform that featured all kinds of content, including vignettes of life in rural China.
By mid-2016, it had gained 50 million monthly users, according to QuestMobile data. Larger rivals such as Weibo Corp and Tencent Holdings Ltd launched their own short video offerings, but were unable to build a loyal community, until ByteDance came along with Douyin, which attracted a younger and potentially more lucrative demographic.
His almost landed on TikTok. In 2017, Alex Zhu and Louis Yang, founders of the karaoke app Musical.ly, were buying their three-year-old outfit, which had amassed 10 million users in the US, mostly kids and teens. They met with executives from Facebook and YouTube, but it was Su who went further in conversations with them. Then ByteDance founder Zhang Yiming, full of cash from his hit news app Toutiao, swooped in and offered to buy the startup for close to $ 1 billion, people familiar with the matter said.
“We didn’t have a lot of money,” Su recounted. “It is an episode of great impact, but it does not determine everything.”
TikTok inherited Musical.ly’s user base, interface, and licensing agreements with record labels, becoming the first Chinese consumer app to go global. That success, having around 100 million monthly users in the US alone, drew hostility from the Trump administration, which argued that its Chinese parent posed a potential threat to national security.
Today, Kuaishou has 1 billion monthly users across all products globally, compared to 1.9 billion for ByteDance. Online ads have surpassed virtual gifts to become Kuaishou’s biggest profit driver, accounting for half of the 17 billion yuan ($ 2.6 billion) revenue for the March quarter. That contribution may reach 60% by the end of the year, Su said, although the firm remains in the red as it adds new businesses such as e-commerce and games.
Some analysts argue that with its size, Kuaishou should already be making a profit rather than spending cash for user growth. Its IPO sponsor Morgan Stanley recently downgraded its stock and lowered its price target by 57% to $ 130.
“If Kuaishou cannot grow organically and smooth costs when competition deteriorates, that means its business model may face great challenges,” said Wang Guanran, an analyst at Shanghai-based Citic Securities Co.
Back at home, both ByteDance and Kuaishou are dealing with Beijing’s crackdown on its tech giants. Kuaishou’s relatively unpolished vibe, which once featured everything from underage mothers to rappers praising drugs, has drawn censorship from the internet regulator over the years. It was one of the internet companies fined this week for spreading sexually suggestive content involving children. Both short video pioneers were among 34 tech giants ordered to comply with Beijing’s antitrust rules in April.
Kuaishou is working closely with antitrust regulators, who have not found any wrongdoing at the company, the CEO said. Su, who issued a public apology for teen mom videos in 2018, says content moderation is the “red line” for internet platforms, adding that she has always recognized her company’s social responsibilities.
Kuaishou will not become another Douyin or TikTok, Su says. Even though your company now relies more on top influencers and celebrities to drive ad sales and e-commerce, it will continue to be a platform for small creators like the busker, pop science writer, and factory worker than Su himself follows and gives advice. Anonymously.
“We are trying to strike a balance between efficiency and fairness, and we would still be the ones who give fairness the highest regard in the industry,” he said.