---
title: "Kuaishou aims to break the deadlock in e-commerce"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/204821660.md"
description: "Start the battle for user acquisition"
datetime: "2024-05-24T15:56:44.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/204821660.md)
  - [en](https://longbridge.com/en/news/204821660.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/204821660.md)
---

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# Kuaishou aims to break the deadlock in e-commerce

Author | Liu Baodan

Editor | Zhou Zhiyu

Last year, Kuaishou's e-commerce scale officially exceeded one trillion, becoming the fifth trillion-level e-commerce platform in China. With the intensification of competition in the e-commerce market, there were concerns about whether the growth momentum of Kuaishou's e-commerce could be sustained. Now, the first quarterly report after Kuaishou's trillion milestone has provided an answer.

On May 22nd, Kuaishou released its financial performance for the first quarter of 2024, with total revenue of 29.4 billion RMB, a year-on-year increase of 16.6%; the gross profit margin increased from 46.4% in the same period last year to 54.8%; adjusted net profit reached 4.39 billion RMB, setting a new single-quarter historical high, far exceeding market expectations.

The contribution of online marketing services, accounting for 56.6% of revenue, achieved a year-on-year growth of 27.4%, which was 12.3 percentage points higher than the same period last year. In addition, live streaming and other services (including e-commerce) contributed 29.2% and 14.2% to the revenue, respectively.

The main driver of Kuaishou's performance still comes from its e-commerce business. In the first quarter of 2024, Kuaishou's e-commerce GMV grew by 28.2% to 288.1 billion RMB, and the growth of e-commerce GMV continued to drive the rapid growth of internal circulation marketing service revenue.

Meanwhile, external circulation marketing service revenue continued to maintain strong year-on-year growth, especially in short videos, with daily average paid consumption in the first quarter increasing by over 4 times. In terms of brand marketing services, the number of brand merchants during the 2024 Spring Festival on Kuaishou increased by over 120% year-on-year.

Cheng Yixiao, co-founder, chairman, and CEO of Kuaishou, stated that in the first quarter, the company's operational and financial performance remained strong, reflecting the strong moat effect of users and commercial ecology. In his view, a strategy of high-quality user growth, coupled with a healthy content ecosystem, can help boost e-commerce growth and improve commercialization efficiency.

However, despite Kuaishou's record profitability, there are still hidden concerns about performance growth, especially in the e-commerce business. The slowing industry growth coupled with intense competitive pressure has cast a shadow over the future of Kuaishou's e-commerce.

Live streaming e-commerce originated in 2016, experienced rapid growth after an initial period of exploration, and is now gradually maturing. According to data from iResearch, the growth rates of China's live streaming e-commerce market in the past five years were 245.9%, 197.0%, 83.3%, 53.7%, and 40.9%, showing a gradual decline trend.

Kuaishou's e-commerce growth is basically in line with the industry. In the past four years, Kuaishou's e-commerce transaction volume growth rates were 539.10%, 78.41%, 32.52%, and 31.43% respectively. As Kuaishou's e-commerce scale exceeded one trillion, its growth rate also showed signs of weakness.

In the first quarter, the growth rate of Kuaishou's e-commerce GMV was 28.2%, basically on par with the same period last year. Kuaishou has clearly recognized this issue and has begun to adjust its e-commerce strategy.

A year ago, Kuaishou e-commerce first proposed the concept of "full-domain operation," with content scenes and "pan-shelves" as the two main directions for future development. This strategy has already shown initial results, with pan-shelf GMV accounting for approximately 25% in the first quarter, and short video e-commerce GMV growing by nearly 100% year-on-year At present, Kuaishou is further adjusting its e-commerce strategy. Last week, at the 2024 Kuaishou E-commerce Gravity Conference, Wang Jianwei, Senior Vice President of Kuaishou and head of the E-commerce Business Unit and Commercialization Business Unit, clearly put forward a user-first strategy, emphasizing that merchants and platforms need to follow the changing needs of users and adjust their business direction.

For example, Kuaishou will weight the matching of people and goods in traffic distribution, allowing products with good value for money and merchants with high ratings to receive more traffic. In addition, Kuaishou E-commerce will also collaborate with various industrial belts to launch a large number of products in the mid-to-low price range.

Another key point of the user-first approach is service. Kuaishou E-commerce has introduced functions such as "multiple items, multiple discounts" and "pay first, use later" on products, and continues to optimize processes such as the proportion of free shipping and return logistics. At the same time, for merchants with higher return rates, measures such as refund only and refunding return shipping fees are provided to consumers.

This year, Kuaishou E-commerce will also provide traffic subsidies and billion-level product subsidies. For various major promotion nodes and marketing IP activities, for example, during the 618 promotion, Kuaishou offered discounts such as "get 60 yuan off for every 300 yuan spent" and "get up to 1888 yuan in red envelopes at the venue".

The extent to which these strategies can translate into performance growth still needs to be verified over time. Cheng Yixiao stated that the company will fully leverage the advantages of short videos + live streaming, continue to strengthen its core competitiveness, and explore new growth opportunities.

It can be confirmed that this is a rather difficult path to growth. After all, while Kuaishou is changing, its competitors are also adapting in a timely manner, especially Alibaba and JD.com are both increasing their efforts in content e-commerce, trying to seize more market share.

The intensification of e-commerce competition is inevitable, and this will be a long tug-of-war, where Kuaishou cannot afford to slack off for a moment

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