Tiktok competitor Kuaishou goes public in Hong Kong
In Hong Kong, the makers of Chinese video app Kuaishou are looking ahead to the world's biggest technology IPO in nearly two years. In the subscription period before the first day of trading on Friday, investors bid $5.4 billion for the shares issued.
According to calculations by financial agency Bloomberg, that's more than any other tech IPO since that of ride-hailing service Uber in May 2019, giving Kuaishou a market value of around $60 billion before the start of trading.
Kuaishou, which literally means "quick hand," is the biggest competitor in China to Chinese video app Douyin, which goes by the name Tiktok in the West.
The app, which claims to have more than 300 million active users, allows users to create their own short videos and share them with other users. However, live streaming is more important for the app's success. Users can be seen giving make-up tips, cooking or dancing.
Business model gifts and online store
Kuaishou's biggest revenue generator is digital gifts that viewers can send to the makers of the live videos. An animated flower costs the equivalent of just a few cents. More expensive gifts can sometimes cost several hundred euros. Kuaishou and the providers of the videos split the revenue.
In addition to advertising, Kuaishou also relies on its own online store, where products that live streamers promote in their videos can be purchased.
Starting problems and further competition
Although Kuaishou's business has grown rapidly in recent years, the startup is struggling with a number of problems. Tighter rules for streaming services in China, for example, could become a burden. Just days before the IPO, the Chinese copyright organization CAVCA also came on the scene, accusing Kuaishou of having numerous users violating music copyrights in their videos.
At the same time, Kuaishou is fighting bitterly for market share with market leader Douyin and other players. The company was profitable in 2019, but posted a loss of 6.3 billion yuan (about 875 million francs) in the first half of 2020, according to its stock market filing. (SDA)
