Mar 29, 2023
Kuaishou Revenue Tops Estimates After Fending off ByteDance
(Bloomberg) -- Kuaishou Technology’s revenue beat estimates, underscoring the resilience of TikTok’s closest Chinese rival with the world’s largest internet arena poised for recovery.
Revenue rose to 28.3 billion yuan ($4.1 billion) for the three months ended December, compared with the 27.3 billion yuan average forecast. Net loss came in at 1.5 billion yuan, versus the 1.84 billion yuan loss projected.
Like many of its rivals, China’s largest short-video platform after ByteDance implemented drastic cost curbs to make it through a year of economic malaise. China reported a rebound in consumer spending after dropping Covid restrictions, but has warned of risks to growth as unemployment rises and real estate investment stalls.
The Beijing-based company is also fighting off heightened competition with ByteDance, whose short-video phenomenon Douyin is morphing to become an everyday app with built-in e-commerce and online grocery features. Tencent Holdings Ltd.’s ubiquitous WeChat platform is also counting on bite-size segments to rejuvenate ad growth. To differentiate itself, Kuaishou is broadening its livestreams to areas like job recruitment and housing sales to entice users and marketers to stay.
Beyond its home turf, Kuaishou is trying to get more out of existing customers in key markets like Latin American and Southeast Asia, rather than going head to head against the much bigger TikTok in a market-share grab. While its domestic division has been operating in the black over the past quarters, Kuaishou’s overseas products still bleed losses as the firm speeds up monetization.
Kuaishou has gained roughly $13 billion — or more than 70% — of market value since its October trough, helped by Beijing’s reaffirmed support for the giant internet sector. Regulators however said this year they will tighten scrutiny over short-video content, especially for underaged users, echoing a 2021 crackdown on the video games industry. Last month, Kuaishou banned half a million accounts for breaching its policy.
In January, billionaire founder Su Hua sold about $480 million worth of his stake in Kuaishou, a year after he stepped down as CEO amid Beijing’s campaign to rein in excesses in the tech sector. Su has said he will use the proceeds to make donations and invest in advanced technology and infrastructure.
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