In 2017, Su Hua, founder of a Chinese startup called Kuaishou Technology, was about to close the biggest deal of his career: the acquisition of a new video service that would become the TikTok. But arch-rivals ByteDance won the dispute with a better offer, and Su lost what has become a global phenomenon.
Now, the 38-year-old businessman is being rewarded in some way. In February, Kuaishou went public in Hong Kong and raised more than $5 billion on the strength of its expanding video and commerce operations. ByteDance, in turn, came into the US government’s crosshairs and later became the target of scrutiny by China, which should delay its initial public offering.
Su is not wasting a minute. With plenty of cash from the IPO, Kuaishou increases investments to catch up with ByteDance, which is four times larger in size. Kuaishou plans to expand in countries like Brazil and Indonesia instead of growing in the US, TikTok’s stronghold. The company plans to double the global workforce to 2,000 employees by the end of the year to accelerate the launch of international products.
Kuaishou may have an advantage over its rival in these markets. While TikTok tends to rely on photogenic teenage dancers, Su stars are a diverse, sometimes simple-minded, often rural group. They include a farmer who drinks heavily and a long-distance truck driver.
“TikTok is a great leader ahead of us globally, but there is still plenty of room for growth,” said Su in his first interview in four years. “Kuaishou’s philosophy is quite different from that of our rivals, and that is based on my personal experiences and values.”
To drive Kuaishou’s expansion, the entrepreneur is implementing a tried-and-true strategy of creating the ordinary citizen video forum, combining artificial intelligence-based recommendations with human curation to deliver a personalized experience. The company aims to reach 250 million monthly users outside China this year, after tripling that base in the past six months. Kuaishou has around 300 million daily users in China.
Kuaishou’s international apps include Kwai, SnackVideo and Zynn. O Kwai, the most successful export product and the international twin of the domestic platform, was downloaded more than 76 million times in the first half of 2021 in countries like Brazil and Mexico, while the SnackVideo it has gained a following in markets such as Indonesia and Pakistan.
|Kuzhou Global Products||Main markets||Downloads in six months|
|Kwai||Brazil, Mexico||76.8 million|
|SnackVideo||Indonesia, Pakistan||48.2 million|
|Zynn||USA, Canada||0.4 million|
|Source: Sensor Tower, first six months of 2021|
About half of its 150 million monthly foreign users now come from Latin America, one of TikTok’s main markets. Earlier this year, Su’s company closed an agreement to sponsor the Copa America 2021. It also pledged to spend $10 million to encourage sports content creators next year.
Like all tech companies in China, Kuaishou has extra motivation to expand abroad while the Chinese government tightens control over the domestic market. Chinese officials have focused on leaders like Tencent Holdings and Alibaba Group, but uncertainty about future regulations has sparked a selloff in the market. Kuaishou stock nearly quadrupled after the IPO and is now close to the offer price.
Orchestrating the company’s momentum abroad is Su’s deputy, Tony Qiu, a former Bain Capital investor and Didi executive who helped the Chinese giant grow in Brazil. Since joining Kuaishou last August, he has put his knowledge of the local market to the test, leading a team of talent hires from Google, Netflix and TikTok. In April, Kuaishou also welcomed Wang Meihong, a former senior engineer at Facebook, to oversee the technology of its global products.
João Paulo Venancios, 22, is a creator of Kwai and lives in Paraíba. Since he started using Kwai in March 2020, Venancios has gained 2.6 million followers with clips in which he and his 70-year-old grandmother show their everyday life and scenes from movies. Local merchants hire him to perform in stores, which earns around R$6,000 a month, enough to rent a house and pursue his dream of becoming a professional singer. It’s a fame he couldn’t have achieved on TikTok or Instagram, whose algorithms make it harder for little-known creators to go viral.
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