Now, the 38-year-old entrepreneur is getting some payback. In February, Kuaishou went public in Hong Kong, raising more than $5 billion on the strength of its rapidly growing video and commerce operations. ByteDance, meanwhile, became embroiled with the US government and then mired in China’s technical crackdown, possibly delaying its initial public offering.
Su isn’t wasting a moment. Flush with cash from the IPO, KuaiSho is spending more than four times its size to close the gap with ByteDance. Kuaishou plans to expand into countries like Brazil and Indonesia, rather than a stronghold of TikTok in the US. The company intends to double its global workforce to 2,000 by the end of the year to accelerate the roll-out of its international products.
Kuaishou can have an advantage over its rival in these markets. While TikTok is stocked with photogenic, dancing teens, Su’s stars are diverse, sometimes low-brow, crews of entertainers, often from rural areas. These include a drinking farmer and a long-distance truck driver.
In her first interview in four years, Su said, “Today TikTok is a big runner ahead of us globally, but there is still a lot of room for growth.” “Kuashou’s philosophy is quite different from that of our peers, and it is based on my personal experiences and values.”
To drive Kuaishou’s expansion, the entrepreneur is deploying a tried-and-tested strategy of creating a video forum for the masses, combining artificial intelligence-powered recommendations with human curation to deliver a personalized experience. His company aims to reach 250 million monthly users outside of China this year, after tripling that base in the past six months. It has about 300 million users daily in China.
Kuaishou’s overseas apps range from Kwai to Snack Video and Zynn. Kwai, its most successful esports and international twin for its domestic platform, has been downloaded over 76 million times in the first half of 2021 in countries such as Brazil and Mexico, while SnackVideo has built a following in markets such as Indonesia and Pakistan. .
Nearly half of its 150 million monthly overseas users are now from Latin America, one of TikTok’s major markets. Earlier this year, Su’s company struck a deal to sponsor the 2021 Copa America tournament, which is a big draw in the region. It also promised to spend $10 million the following year to incentivize game content creators.
Like all tech companies in China, Kuaishou has additional motivation to expand overseas as Beijing cracks down on its domestic industry. Chinese authorities have focused on leaders such as Tencent Holdings Ltd and Alibaba Group Holding Ltd, but uncertainty over future regulations has ignited a broader market route. Kuaishou’s stock nearly quadrupled since its debut and has since fallen near its offering price.
Organizing the company’s overseas push is Su’s lieutenant Tony Qiu, a former Bain Capital investor and Didi executive who helped the Chinese ride-hailing giant build its presence in Brazil. Since joining Kuaishou last August, he has been testing his knowledge of the local market, leading a team of hiring from Google, Netflix Inc and TikTok. In April, Kuaishou also welcomed Wang Meihong, a former senior engineer at Facebook Inc., to oversee the technology for its global products.
“It’s not just creative minds or young, trendy users who are lip-syncing and dancing that come to our platform,” Qiu said. “Kuashou is more universal.”
Take 22-year-old kwai maker Joo Paulo Venancios, who lives in the state of Paraiba, northeastern Brazil. Since debuting on Kwai in March 2020, Venancios has amassed a following of 2.6 million people with clips where he and his 70-year-old grandmother reenact daily life and film scenes. Local merchants hired her to make appearances in their stores, earning her around 6,000 Brazilian reals ($1,149) each month – to rent a house and fulfill her dream of becoming a professional singer. Sufficient. It’s a fame he couldn’t make on TikTok or Instagram, whose algorithms make it more difficult for lesser-known creators to go viral.
“My grandmother is very funny, and we formed a bond,” he said. “People on Kwai find my videos more relevant.”
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This down-to-earth nature of Kuaishou’s platforms reflects the humble beginnings of its founder. While Su now has a net worth of about $9 billion, he was born and raised in a small village in China’s central Hunan province. From there, Su cracked the country’s tough college entrance exam and entered the prestigious Tsinghua University, where she studied software programming before working as a developer at Google and Baidu Inc.
“As I grew up, I saw more people who didn’t have the same opportunity as me,” Su said. “So I hope Kuaishou provides them with another way to interact with a world different from their own.”
His experience propelled Su toward entrepreneurship: Prior to Kuaishou, he worked on more than 30 projects in areas ranging from video advertising to mobile search and e-commerce. All flopped. Ruby Lu, a venture investor who made an initial stake in Kuaishou for DCM Ventures, then noticed Su’s engineering talents.
“He came across as a super geek,” she said. “In my book, that’s a compliment.”
In 2013, he met fellow software engineer Cheng Yixiao over a dinner that lasted until 2 p.m. Together, they transformed Kuaishou, which Cheng had launched as a GIF maker two years earlier, into a video-sharing platform that featured all kinds of content, including vignettes of life in rural China.
By mid-2016, it had 50 million monthly users, according to data from QuestMobile. Big rivals such as Weibo Corp and Tencent Holdings Ltd whip up short-video offerings of their own, but haven’t built up a loyal community until ByteDance came along with Douin, which created a younger – and potentially more lucrative – short-video offering. appealed to the demographic.
Su almost reached TikTok. In 2017, Alex Zhu and Louis Yang, founders of the Musical.ly karaoke app, were shopping around for their three-year-old outfit, which had 10 million users in the US—mostly children and teens. He met with executives from Facebook and YouTube, but it was Su who came to the fore in the conversation with him. Then ByteDance founder Zhang Yiming, flush with cash from his hit news app Toutiao, swooped in and offered to buy the startup for around $1 billion, people familiar with the matter said.
“We didn’t have much money,” Su said. “It’s an episode of significant impact, but it’s not what determines everything.”
TikTok inherited Musical.ly’s user base, interface, and licensing deal with the record label, becoming the first Chinese consumer app to go global. That success – it has nearly 100 million monthly users in the US alone – attracted hostility from the Trump administration, which argued that its Chinese parent posed a potential national security threat.
Today, Kuaishou has 1 billion monthly users across all products globally, while ByteDance has 1.9 billion. Online ads have overtaken virtual gifts to become Kuaishou’s biggest earnings driver, making up half of 17 billion yuan ($2.6 billion) of revenue for the March quarter. That contribution could reach 60% by the end of the year, Su said, although the firm remains deep in the red as it adds new businesses such as e-commerce and gaming.
Some analysts argue that at its size, Kuaishou should already be generating profits rather than burning cash for user growth. Its IPO sponsor, Morgan Stanley, recently downgraded its stock rating and lowered its target price by 57% to $130.
Wang Guanran, a Shanghai-based analyst at Citi Securities Co., said, “If Kuaisho cannot grow organically and smooth out costs when competition deteriorates, it means its business model could face major challenges.” Is.”
Back at home, ByteDance and Kuaishou are both grappling with Beijing’s crackdown on their tech giants. Kuaishou’s relatively unapologetic vibe — which once featured everything from underage moms to rappers praising drugs — has drawn condemnation from internet regulators for years. It is among Internet companies that have been fined this week for spreading child pornographic material. Both the short videos were among 34 leading tech giants that were ordered in April to comply with Beijing’s anti-monopoly rules.
The CEO said Kuaishou is working closely with antitrust regulators, who have found no wrongdoing in the firm. Su, who issued a public apology for teen-mom videos in 2018, says content moderation is a “red line” for Internet platforms, adding that she has always recognized her firm’s social responsibilities.
Kuaishou won’t become another Douyin or TikTok, Su says. Even though his company is relying more heavily on top influencers and celebrities for juice advertising and e-commerce sales, it will continue to be a platform for smaller creators like street buskers, pop-science writers, and factory workers to be managed. Follows himself and gives suggestions. anonymously.
“We are trying to strike a balance between efficiency and fairness, and we will still be the ones who value fairness the most in the industry,” he said.
Watch Chinese billionaires who missed Tiktok are now trying to beat it
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