The Class Divide of Video Streaming in China: Village Cowboys VS. Urban Celebrities

In China, the tech world is rife with rivals. For bike sharing, there’s Mobike and ofo. For ride-hailing, there’s Didi and Uber (and we know how that turned out). And for vlogging and short videos, there’s Miaopai and Kwai.

Much like Vine and Twitter, Miaopai shares a close relationship with Sina Weibo and can be considered part of Alibaba. Meanwhile, much of Kwai’s investment comes from Tencent.

While these two apps are similar at first glance, they seem to be on completely different paths.

Content vs. Connection

When it comes to deciding what kind of content is important, Miaopai and Kwai are going in completely different directions. And this is most obvious from their app interfaces.

For Kwai, its interface has only three drop-down buttons – namely “following”, “discovery”, and “those nearby”. Miaopai is more complicated. The menu on the top row is divided according to genres that run up to 17 different ones. The lower row is a lot more personal and current, with trending and discovery functions.

Miaopai’s focus is on serious content, and they are willing to support and push good ones. Last week, Yixia Technology (一下科技), the parent company of Miaopai, opened its third base and studio in Xi’an in a bid to support local content creators. They also have two incubation bases in Shanghai and Chengdu. From the early startup phase to it’s current status today, it can be said that Miaopai’s always had a 360-degree approach to support and customer service. At present, Miaopai covers more than 40 different fields, has some 5,000 content creators, and are cooperating deeply with more than 2,000 multi-national companies.

Here’s how Kwai differs. With a background in science and engineering, founder Su Hua said” Kwai is a projection and a record of the real world.” The content on Kwai is very much directed by its users, as the app doesn’t guide users on what to create, won’t influence what’s popular, and doesn’t sign on content creators as their own (unlike Miaopai).

Why is the emphasis on content between the two so different?

Perhaps one of the reasons lie with the founders’ different backgrounds. Miaopai’s founder Han Kun, used to be a shift editor for Sohu, a video streaming site, and was also the chief editor of Chinaren, an online portal which is also a subsidiary of Sohu. Content is king in these mega portals, and his background in content curation might possibly influenced the way he set up Miaopai. Meanwhile, Kwai’s two founders, Su Hua and Cheng Yixiao are science and engineering majors. Might that be the reason why it’s more focused on having a good user interface and experience?

Next, there are two things to consider when making short video: Content and Community. Miaopai is closely linked with Sina Weibo and the videos can be uploaded on this open, social platform where it can be viewed by thousands or even millions. Hence, the emphasis on good content is necessary.

But as for the newly-developed Kwai with no other social media platform to depend on, it has to start its own independent community from scratch, and this could explain why the founders are focusing on creating connections and relationships.

Understanding a user base

Based on the amount of users, both Miaopai and Kwai are the current leaders of this industry

QuestMobile data for the first quarter of 2017 showed 1 billion monthly users for China’s mobile video industry, with a year-on-year growth of 58%. Active users for short video apps hit 276 million and 25.77 monthly and daily respectively. As of June 2017, Kwai has acquired over 500 million registered users, with daily users hitting close to 60 million.

Although both apps have a similar amount of users, their audience base is very different.

Most of Kwai’s users are your “common” people, concentrated in vast villages and rural towns. With Kwai, these people who in the past never had the opportunity to speak up much in society, are now able to express themselves. China’s social structure is shaped like a pyramid, and these people in rural areas make up the base. Given the popularity of the app with the masses, it is no surprise that Kwai has found so much success.

In order for Kwai to increase its user base, it should focus from bottom up, starting from the villages and then fanning out to the cities. But in order to attract those from the top of the pyramid and those from second-tier cities like Chengdu, Chongqing and Suzhou, perhaps Kwai needs to consider its currently tacky image.

Miaopai’s strategy is “Star + PCG”. Backed by Sina Weibo, Miaopai’s users are highly similar to that of the microblogging site, with a concentration of top stars and media entities. Currently, there are more than 3,000 live-bloggers turned celebrities, and more than 10,000 media and PCG creators. These main users drive most of Miaopai’s content to ensure its viral impact and influence. Of all the short videos that China sees, 95% of them currently bear Miaopai’s watermark.

The number of Miaopai users currently overlap with that of Sina Weibo and currently reaches 276 million. The microblogging site will reach 400 million active monthly users this year, and its growth is expected to reach more than 30%. Based on this logic, Miaopai’s growth of users will definitely increase if it continues to rely on Sina Weibo’s influence. But the challenge for Miaopai is move out of the system to attract more users outside Sina Weibo. Based on its user attributes, Miaopai’s growth model should target those with more social capital and focus from the top down, with top stars pulling their influence allowing for a broader playing field.

The path to monetisation

Profit is not the main motivation for both the founders of Miaopai and Kwai. For them, it’s about getting around their trials and tribulations.

So how can a business stay afloat?

Just a few days ago, I became a fan of two chowhounds on Kwai – two brothers from a rural village in Henan. Everyday they would broadcast themselves eating to 1.5 million fans, and each clip would usually see more than a million live viewers tuning in. If they were on any other platform, they would have been able to make their own living earning enough. But according to media reports, they were only just able to get by with some 10,000 yuan (nearly US$1,500). I clicked on more than ten of their videos from Kwai, but did not find a single advertisement on their video.

Kwai no doubt has a high affinity with its live-streamers and audiences – they’re mostly from the same social class and are able to easily identify with each other. But the content creators are unable to make these views and brand influence profitable – and this is the embarrassment of Kwai’s quick success and commercialisation. Even though users like two brothers may have a huge following, advertisers are still hesitant.

Once again, because of its deep relationship with Sina Weibo, advertisers on the microblogging site are able to utilise Miaopai in their video posts – we’re talking big stars, online celebrities and experts. And with Sina Weibo’s open platform, communication, influence, and conversion power is slightly better. Furthermore, compared with the users on Kwai, the income level and consumption levels of Miaopai users are higher. For advertisers who want to seize a brand new market or consumer, Miaopai is definitely the more attractive option.

But with 500 million registered users, Kwai is definitely on the path of making money sooner or later. In fact, think about overlap between Kwai and the rapid news that’s coming out every day. Therefore, Kwai can use news headlines to drive the monetisation of Kwai, spurring small- and medium-sized companies to carefully curate a feed of targeted ads. Who knows what the future holds for this fast-rising app?


This article originally appeared in tmtpost and was translated by Pandaily.

Click here to read the original Chinese article.