As TikTok seizes more territory around the world, its archrival Kuashou that so far hasn’t been as successful internationally is ramping up efforts to narrow the gap with its competitor. China’s second-biggest short-video company that caught on massively in lower-tier cities and rural parts of the country has recently launched two full-blown assaults on TikTok overseas.
In April 2020, Kuaishou launched a short-video app called SnackVideo on Google Play. Unlike its other overseas short-video product, Kwai, SnackVideo more closely resembles ByteDance’s TikTok and is built upon a recommendation algorithm that more accurately suggests videos based on users’ preferences.
Roughly a month after the release of SnackVideo, another short-video app, Zynn, made headlines after briefly becoming the most downloaded iOS app in the US. The developer of Zynn is Owlii, a company owned by Kuaishou. The new app attracted users by rewarding them with cash and other bonuses for watching content and recruiting other users.
Overseas markets have always been of strategic importance to Kuaishou, but the company is having a hard time repeating its domestic feats globally. Chinese journalists like to accent Kuaishou’s failed attempt to outbid ByteDance for ownership of Musical.ly in 2017 as the main antecedent to all its future international failures. That was the first time the two short-video giants officially clashed.
A person familiar with the matter once disclosed the details of the negotiations. He revealed that Kuaishou was first to make Musical.ly an acquisition offer. However, Fu Sheng, an angel investor in Musical.ly allegedly asked the buyer to also purchase two of his other overseas oriented products, News Republic and Live.Me. Kuaishou expressed strong opposition and even accused Fu Sheng of “playing rogue.”
While Kuaishou was contemplating its move, ByteDance interfered and swiftly acquired Musical.ly for $1 billion, essentially purchasing the foundation upon which TikTok built its presence in North America and later in the rest of the world.
Kuaishou lost its golden ticket to global expansion and had to build its international strategy from ground zero. The company’s main product overseas, Kwai, essentially the translated version of the Chinese app, lost to TikTok on pretty much all fronts, forcing the company to downsize staff, change leadership and even fold operations in Southeast Asia.
In today’s overseas short-video market, ByteDance is an inescapable fixture. According to Sensor Tower data, in January 2020, TikTok’s global downloads reached 104 million, ranking first; Kuaishou on the other hand ranked eighth, while its international version, Kwai, did not even make it into the top ten.
After Kwai’s lackluster performance, Kuaishou decided to restart its overseas advances in mid-2019. The first step was to establish a solid foothold in Brazil, one of the few markets where the company’s products Kwai and VStatus performed quite well. According to the data released in the second half of 2019, Kwai repeatedly topped Brazil’s app downloads lists, while VStatus, consistently followed.
Inspired by its Brazillian success, Kuaishou rushed to secure a spot in the broader Latin American market. In March, the company started headhunting video content operations and social media operations personnel in Mexico and Argentina, aiming to enter both of those respective markets.
Kuaishou owes some of its success in South America to the fact that TikTok was late to enter the market. Kwai took the opportunity in Brazil with the backing of Tencent, one of its main investors. App Annie data shows that from June to August 2019, Kwai ranked fifth in the Brazilian app download list, while TikTok ranked 117. However, ByteDance had already earned itself a reputation as a dangerous opponent. By mid-December, TikTok caught up with Kwai on Brazilian Google Play. Both apps ranked in the Top 5.
Yet, it is not only ByteDance that poses a threat to Kwai’s dominance in the country. According to rough statistics, there are no fewer than six short-video apps competing for Brazilians’ attention. The most notable ones include short-video app Likee, short-video production tool Noizz, video community Lomotif and the WhatsApp video status creation tool Zapee.
There is even more heavyweight competition globally. In May 2019, Indian short-video product VMate surfaced with financing of over $100 million from Alibaba. In less than half a year, VMate’s monthly active users increased from 30 million to 50 million, making it the third-largest short-video platform after TikTok and Likee in the Indian market.
Pressure comes from all directions, with TikTok becoming the talk of the town in the past several years. ByteDance recently made important personnel changes, as the company’s global CEO Zhang Yiming said he would devote more time and energy to overseas markets, which means that the battle for global short-video dominance is just about to begin.
It remains to be seen whether Zynn or SnackVideo could help Kuaishou emerge as a winner in the increasingly tumultuous market. The company showed an ability to quickly gain traction overseas, but never managed to retain it. In this regard, the recent popularity of Zynn also seems questionable, as users are mostly showing up for cash rewards and it is unclear how Kuaishou intends to keep them interested.