5 min read.
As the world comes to a standstill and the global economy plunges into the worst recession since World War II, the magnitude of disruption to millions of businesses around the world – both in breadth and depth – caused by the novel coronavirus cannot be understated. Yet, there is one particular industry that has conversely thrived amidst these turbulent times, recording a whopping 99 percent growth between April 2019 and April 2020 while the rest of the world struggles to keep afloat: the livestreaming industry. In this article, we compare two of the world’s most prominent livestreaming platforms, namely Kuaishou and BIGO Live, to gain some valuable insights.
Before we begin, let us familiarize ourselves with the two companies. Kuaishou is China’s leading short video-sharing and livestreaming application with over 300 million daily active users and over 20 billion videos stored, making it the world’s largest short-video library. Its features include providing a chatroom for up to six users to co-host livestreaming and enabling livestreaming hosts to chat with strangers who call in. Meanwhile, BIGO Live is an exclusively livestreaming application based in Singapore, with an average of 23.1 million monthly active users in over 150 countries. Its main feature is that it allows viewers to comment and send virtual gifts to their most beloved livestreaming hosts.
Although both companies offer similar services in terms of allowing users to broadcast and interact with their followers in real-time, they differ significantly with regards to the user base they serve. For Kuaishou, its target audience is the masses living in the rural areas of China, as seen from how a large portion of its users (64 percent) comes from lower-tier cities. As Kuaishou undergoes strict regulation by the Chinese government (much like ByteDance’s Douyin), it is mainly built for the consumption of Chinese users. Conversely, although BIGO Live is based in Singapore, it targets the overseas market outside of China, evident from how overseas users account for 77 percent of its monthly active users.
Since the two companies serve different user bases, it is unsurprising that they would adopt fairly different business models to cater to the needs of their users and trends in their respective markets. In Kuaishou’s case, the company has been channeling copious amounts of resources into the livestreaming e-commerce sector – a sector which has taken off during the Covid-19 pandemic as consumers’ purchasing behavior was forced to shift from brick-and-mortar stores to online platforms. As a result, numerous physical store operators have been turning to apps such as Kuaishou to sell their products over livestreams. To facilitate greater growth in this sector, Kuaishou launched its own shopping festival “Kuaishou 616 Shopping Carnival” and even collaborated with China’s e-commerce giant JD to launch a 24-hour shopping extravaganza. The result was a tremendous success with total paid transactions amounting to over $200 million (1.42 billion yuan) on June 16 alone. These developments inspired Kuaishou to recently invest $424 million (3 billion yuan) to build a live-streaming e-commerce base in Chengdu to integrate multi-channel networks, key opinion leaders (KOLs), and e-commerce sellers as part of its broader plans to create a livestreaming e-commerce ecosystem.
Meanwhile, though BIGO Live also utilizes livestreaming, it derives the majority of its revenue from in-app purchases in the form of virtual gifts sent by users to their favorite broadcasters. Viewers can purchase virtual gifts for as little as $1 to reward their preferred hosts in exchange for them performing a request by viewers. Interestingly, BIGO Live does not have advertisements on its platform, as it opts to encourage interactions between users and broadcasters to utilize the in-app currency. Yet, despite the seemingly limited scope of its revenue source, BIGO Live earned approximately $40.2 million through such transactions in the first quarter of 2020.
Up till this point, we see how the two companies operate to varying degrees. However, when it comes to giving back to society, both companies champion similar messages for social good. From Kuaishou’s prioritization of users from rural areas in China, we can infer Kuaishou’s dedication in giving a voice to the people living in the less-developed parts of China where few companies have bothered to serve previously due to their lower purchasing power. In its mission to empower less-educated users to kick-start their e-commerce business on the platform and uplift themselves from poverty, Kuaishou launched “Kuaishou for Social Good” initiative in 2018 where it offers both online and offline e-commerce expertise and aid for users on its platform. By the end of 2018, this initiative, alongside other parallel programs, managed to not only help these rural entrepreneurs generate $1.4 million in revenue, but also lift 500 households out of poverty. Furthermore, the app ensures a fairly even distribution of traffic to KOLs so that new users are given equal opportunities of having their content viewed by others, therefore increasing their chances of becoming viral. In the same vein, BIGO Live has also been working towards building its corporate social responsibility (CSR) image through its CSR program where it has, for instance, launched free online education channels in India to improve users’ digital literacy, among many other initiatives. Recently, it had also announced its collaboration with a popular Malaysian hip-hop group ‘K-Clique’ to hold their virtual live concert exclusively on BIGO Live whereby all proceeds from the event are pledged to be donated to MyKasih Foundation – a non-profit organization that aids low-income families.
Here is a summary of our findings:
All in all, although both companies mainly operate in different markets, the initiatives they used are largely applicable in most contexts, as seen from how they share similarities when it comes to making meaningful social footprints for the good of society as a whole. As such, we can suggest BIGO Live to learn from Kuaishou’s entry into the livestream e-commerce market, especially with its relevance and massive potential during this period of self-isolation and social distancing. However, at the same time, BIGO Live has to be sure not to simply enter the market without offering something different from its competitors or it will lose out in this rat race towards the uncharted frontiers of livestreaming e-commerce.
Founded in 1992, NUS Entrepreneurship Society (NES) is Singapore’s premier tertiary Entrepreneurship organization established by alumni from the National University of Singapore. What started off as a platform for students to come together and find business partners has since evolved into a society that organizes a myriad of events, from global entrepreneurial conference ‘Unicorn’ to hackathons and pitching competitions such as ‘Ground Zero’ and ‘StartUp-X’.