Kuaishou ushered in a new CEO, and it needed a new story

On the evening of October 29, Kuaishou Technology issued an announcement that the board of directors had agreed that Kuaishou co-founder Su Hua would resign as CEO and co-founder Cheng Yixiao would take over the position, effective immediately. Su Hua will continue to serve as chairman and is responsible for formulating the company's long-term strategy. As the CEO, Cheng Yixiao will be responsible for the daily operation and business development of the company, reporting to Chairman Su Hua.

Su Hua led Kuaishou to eat the dividends of short videos, allowing Kuaishou to degenerate from a tool platform to a short video social platform. However, Kuaishou encountered the up-and-coming star of the short video track "Douyin", according to the China Internet Information Center, now in the daily active data, Kuaishou is lower than Douyin and video numbers, ranking third. The development of Kuaishou's e-commerce business is also not as good as the company's expectations, according to the late Late Post report, Kuaishou E-commerce will be this year's total turnover (GMV) target at 650 billion yuan. The previous target was 750 billion to 800 billion yuan.

At noon on November 1, it was HK$99.750/share, down 76.12% from HK$417.8/share at the beginning of the listing.

The continuous decline in stock prices, the bottleneck of new user growth, the fall behind in the industry, and the downward revision of the annual GMV target have forced the company to think newly.

Dual-core era

In 2011, The GIF Kuaishou founded by Cheng Yixiao rode on the outlet of Weibo Doutu to quickly aggregate a large amount of traffic and ate the first wave of dividends.

In 2013, Kuaishou GIF encountered a bottleneck in development. First, the content on Kuaishou is too single, there are three main types of content: beautiful selfies, children, pets; the second is the bottleneck in team expansion and management, Cheng Yixiao is a very good product manager, but lacks the experience of the management team, relatively bad at words, so it encountered a bottleneck in the early financing and expansion of the team. As an early investor in Kuaishou, Morningside Capital Zhang Fei found Su Hua, who had just failed to start a business.

In order to show his sincerity, Cheng Yixiao took out half of his 80% shares and half of Zhang Fei's shares, put together 50% of the shares to make an option pool, and distributed most of the shares to Su Hua and his 7-person team. At the same time, the POSITION of CEO was also given directly to Su Hua. With the official addition of Suhua, Kuaishou opened the dual core era.

After Su Hua took office, Kuaishou continued to strengthen the attributes of products and tools, and also began to increase its efforts in community operation, and introduced an algorithm recommendation system, and joined hands with Cheng Yixiao to create the era of short videos. The addition of Suhua has greatly improved Kuaishou's engineering capabilities, stability and architecture of system performance. In 2014, GIF Kuaishou changed its name to Kuaishou, and in 7 months, the DAU grew from 1 million to 10 million.

Su Hua and Cheng Yixiao have always had a clear division of labor, and each manages a business. Su Hua was outside the lord, and Cheng Yi smiled inside the lord. Su Hua served as CEO and Cheng Yixiao served as Chief Product Officer. Su Hua is responsible for commercialization, investment and financing, overseas, GRPR, administrative personnel finance and external business, while Cheng Yixiao leads important business departments such as products, operations, e-commerce, and games.

Kuaishou degenerated from a tool platform into a short video social platform, which can be said that It is Su Hua who led Kuaishou to eat the dividends of this wave of short videos.

Worry

But soon, Kuaishou encountered the up-and-coming star of the short video track " Douyin".

In 2017, when Kuaishou's daily active life reached 40 million, Douyin, which was founded only one year ago, still had only a few hundred thousand daily active. However, the "headline system" of Douyin immediately began a significant expansion, in February 2018, Douyin sponsored the Spring Festival Gala of each David TV, an increase of nearly 30 million daily active users; in April of the same year, Douyin's daily active users have surpassed Kuaishou.

Once, in an internal CEO meeting, the intranet had a question that was pushed up: "How to open up the gap between Douyin and Douyin in the sinking market?" Su Hua's answer to this was: "Is this a friend from afar, we should talk about how to narrow the gap, right?" ”

Nowadays, in the daily active data, Kuaishou not only has an opponent of Douyin. According to the report of the China Internet Information Center, Douyin daily active more than 600 million, WeChat video number daily active 450 million, Kuaishou financial report shows that the average daily active users in Q2 2021 is 293 million, and the short video leader in 2017 has fallen behind.

In addition to daily life, Kuaishou's worries are also vividly expressed in the stock price.

On February 5, 2021, Kuaishou was listed on the Hong Kong Stock Exchange, becoming the "first short video stock". On the day of listing, Kuaishou ranked fifth among Chinese Internet companies with a market value of 1.23 trillion yuan, surpassing JD.com, Xiaomi, Baidu, NetEase and other companies.

However, the aura of "short video first strand" did not shine for too long. According to Kuaishou's second-quarter financial report, the adjusted net loss was 4.77 billion yuan, which has recorded a loss of nearly 5 billion yuan for two consecutive quarters, and the loss in the quarter expanded by 146.2% year-on-year.

The "myth of making riches" in Kuaishou, which is the peak of listing, has long since dissipated, and at noon on November 1, it was 99.750 Hong Kong dollars per share, down 76.12% from 417.8 Hong Kong dollars per share in the early days of listing.

Kuaishou needs a new story

According to the Statistical Report on the Development of China's Internet Network released in February, the number of online video (including short videos) users in China reached 927 million, accounting for 93.7% of the total netizens. Among them, the scale of short video users reached 873 million, accounting for 88.3% of the total netizens. That is to say, the growth dividend of short video has basically disappeared, and Kuaishou will face the competition of a stock market.

In order to compete for users, Kuaishou continues to increase sales and marketing expenses, in the first quarter of this year, this part of the expense reached 11.66 billion yuan, accounting for 68.5% of the total revenue, the second quarter of 11.3 billion yuan, accounting for 58.9% of the total revenue.

The huge marketing costs have also not led to a huge increase in users. According to the financial report, the average daily active users of Kuaishou in the second quarter of 2021 were 293.2 million, the average monthly active users were 506 million, the average daily usage time of each daily active user was 106.9 minutes, and the average online marketing service revenue per daily active user was 34 yuan.

The development of Kuaishou's e-commerce business is also not as good as the company expected. According to the late LatePost report, Kuaishou E-commerce has set its total turnover (GMV) target for this year at 650 billion yuan. According to previous public reports, the goal of Kuaishou e-commerce is 750 billion to 800 billion yuan.

Kuaishou financial report shows that the company's total e-commerce transactions in the half year are 263.957 billion yuan. Compared with the upper limit of the 800 billion target set at the beginning of the year, the completion rate is about 33%, so it is not surprising that the company has recently lowered its annual target.

According to the Ping An Securities Research Report, the current live e-commerce shows a three-legged competition pattern of "Taojiao Fast". Research report data show that from the perspective of GMV in 2020, Taobao live GMV reached 400 billion, Douyin live GMV was about 500 billion, and Kuaishou live GMV was 381.2 billion.

The continuous decline in stock prices, the bottleneck of new user growth, the fall behind in the industry, and the downward revision of GMV's annual target have forced the company to think newly. Eager to tear off the "earthy" label Kuaishou needs a new story, where will the new CEO lead Kuaishou?