Late on Thursday, the Chinese short-video sharing app Kuaishou(快手) officially filed for an initial public offering on the Hong Kong Stock Exchange. The offering is expected to raise $5 billion.
According to the prospectus, Kuaishou booked RMB 8.3 billion, RMB 20.3 billion, and RMB 39.1 billion in revenue from 2017 to 2019, respectively. And in the first half of the year, the revenue rose 48% to 25.3 billion yuan. Its daily active user count grew nearly 50% from the end of 2019 to reach 257.7 million.
Unlike its rival ByteDance, Kuaishou relies on domestic business growth, whereas TikTok has many overseas users. Thus, as Chinese people spending more time at home during the COVID-19 epidemic, Kuaishou has seen its viewing audience grow significantly.
The prospectus shows that Kuaishou's active viewers spent an average of 85 minutes a day on Kuaishou's app during the period, a 14% increase from last year's average. But the rise in Kuaishou viewers has come at a significant cost. In H1 2020, the company's spending on promotions and advertising was 13.3 billion yuan ($2 billion), while the number was 2.8 billion yuan in the same period last year.
Currently, the live-streaming broadcast is a major source of Kuaishou's revenue, especially the cooperation with educational KOLs. The live-streaming business generated RMB 17.3 billion in revenue in the first six months of 2020, accounting for 68.5% of the company's total revenue in the same period.
Kuaishou claims in its prospectus that new business opportunities will lie in the sectors, including e-commerce, online games, online education, and other value-added services.
Vying for the educational market shares, Kuaishou partnered with Zhihu, a Chinese knowledge-sharing platform, to support content creators with more internet exposure. It also invested multimillion yuan to Huohua Siwei, an online education company starting from mathematical thinking training.
Kuaishou's community attributes can naturally enhance follower trust, which is more conducive to improving the conversion rate. Leading Chinese ed-tech companies like TAL, GSX, Yuanfudao, VIPKid, and Zuoyebang have opened accounts in Kuaishou. In the first half of this year, more than 55,000 teachers shared educational videos and live-streamed in Kuaishou, covering 16 million students with about 3.39 million paid hours.