Opportunities for Global Sports Brands on Kuaishou
Following a tidal wave of publicity and activity surrounding Kuaishou at the start of 2021, we’ve decided to take a deep dive into what opportunities lie ahead for global sports brands with the platform.
The company completed an astonishing IPO in Hong Kong earlier this month, announced ecommerce sales figures for 2020 that have established giants such as Alibaba worried, and is emerging as a home for sports brands and organisations in China.
We break down why Kuaishou has everything in place to grow significantly in 2021, and why sports brands should pay close attention to the opportunities this will open up.
Before we dive in, it’s important to understand where the app fits within China’s complex digital landscape. It does not slot neatly into one category, as it's a major player in both the short video and ecommerce sectors. It’s also an industry leader in live streaming capabilities, delivering competition to internet giants across multiple sectors.
With 300M daily active users and the most sophisticated live commerce function of all Chinese short video apps, Kuaishou has already become a major digital player in China, offering untapped opportunities for the world’s biggest sports organisations and brands.
2020 was the year sports entered the Kuaishou ecosystem. Chelsea became the first European football club to launch an account, while Cristiano Ronaldo was announced as an official ambassador growing 5M followers in just 48 hours. The NBA also launched its official Kuaishou account in September, with the hashtag #NBA ranking top of the trending topics page soon after. Here is a rundown of the key takeaways we explore:
Kuaishou’s USP - engaged and tech-savvy users across China’s emerging cities.
Livestream strength - 170M engaged viewers of live streams on the app.
Driving sales via ecommerce - native ecommerce stores for brands to easily set up on the platform.
Social gifting - Kuaishou users gift their favorite influencers more than any app in the world.
IPO and the future - investor confidence is high and a huge cash reserve available to grow rapidly.
Kuaishou focuses on differentiating its offering to consumers. The app initially targeted users outside of the most affluent tier-1 and tier-2 cities, as well as adapting their algorithm to appeal more to the community centred social habits of these users. Kuaishou’s “Discover” section selects 40-50% of content from accounts that the user already follows, a much higher percentage compared to Douyin (the sister app of Tik Tok which is for the Chinese market).
Traditionally, sports organisations have opted to set up accounts and invest resources in creating engaging content on rival platform Douyin, attracting more affluent fans and latching onto the trendier trending topics and crazes that spread on the ByteDance-owned platform. Yet with the growing saturation of sports content and accounts on Douyin, many are now seeing the potential to recruit new fans and open up new channels of monetisation through the growing user base on Kuaishou.
The real value add for brands
Aside from the lure of a huge number of daily users, Kuaishou has a wide selection of functions and features which official accounts can use. Live streaming is incredibly popular on the app, with 170M of its registered users being live stream viewers. The majority of live streams incorporate ecommerce, with viewers able to buy directly from the stream with a simple click, as Kuaishou offers its own native ecommerce stores.
This presents a huge opportunity not only to engage fans but also to increase revenue and sell products to Chinese customers. The journey to setting up a native Kuaishou store is simple for brands, and Kuaishou only charges a 1% payment fee for merchants with a gross merchandise volume below US$14,398, which is considerably less than the market rate.
Douyin also incorporates live streaming ecommerce, just last year Premier League club Tottenham Hotspur successfully ran a live commerce stream on the platform. However, data for 2020 shows that although Douyin has more users, sales through their live stream services stood at US$30.1B (compared to US$51.5B USD on Kuaishou).
Kuaishou is also the biggest live streaming platform for virtual gifts, with more paying monthly users than any other in the world. It allows users to send gifts to their favorite live streamers, which then converts into real money. For example, pop superstar Jay Chou held his first live stream on Kuaishou in July 2020, attracting over 60M viewers in the 30-minute stream and receiving over US$3.5M in gifts from his fans.
Utilising the platform
The most notable official sports account addition to Kuaishou at the end of 2020 was Chelsea FC, as they became the first non-Chinese football team to launch a verified account.
Chelsea are active on both Douyin and Kuaishou, and although both platforms are driven by short video content, there are clear differences between the two. Chelsea adapt language and presentation of content on the platforms to appeal to the differing demographics as well as altering content to follow the differing trending topics. The club amassed 370K+ fans on Kuaishou within 2 months of the account being set up, compared to 2.6M on their longer established Douyin account.
Chelsea hosted their first live stream on Kuaishou in January, with an influencer taking fans through a stream of classic goals and matches, whilst setting quizzes and encouraging interaction in the comments. The reaction from fans was positive and views reached around 300K across the stream, a healthy number for a newly opened account. This could lay foundations for the incorporation of live commerce into the streams in the future, as we have seen many other brands do on the platform.
Cristiano Ronaldo also joined Kuaishou as an official sports brand ambassador at the end of 2020. Ronaldo agreed a partnership to open an account on the platform, as well as live streaming and content creation commitments. His official account now has over 7.5M fans since its launch two months ago, and the Kuaishou challenge video he created to launch his account has 500K likes to date. His account posts content every day (mainly taken directly from his global channels) but his engagement driving content is the original and exclusive China content he posts once a month on average.
This reflects the first-mover advantage that sports teams and athletes could potentially get on Kuaishou. As the platform is looking to attract more teams, organisations and players to the platform, there are possibilities of negotiating to get more traffic directed to your account and better incentives for fans to follow and interact.
Learnings from non-sport brands
Last year saw a rush of brands across multiple industries jump into Kuaishou. Ranging from car manufacturers to fashion and beauty brands, they were all focused on gaining traction with users in developing cities and towns in China, as well as utilising the industry leading live streaming and ecommerce services that the platform provides.
Volkswagen have used the platform to live stream their booth at the Beijing auto show, offering exclusive content and explainers through live stream, targeting rural and newly affluent users on the app who often benefit from government subsidies to purchase cars.
Many brands are also tapping influencers on the platform to boost their viewing and sales numbers, and influencers have been the driving force behind the expansion of live streaming and other revenue driving features. An influencer on the app named ‘Xinba’, whose Kuaishou page has over 60m followers, recorded sales of US$175M in just a 10-hour livestream in 2020, selling from a wide range of industries including beauty products, alcoholic beverages and health brands.
However, according to Yu Shuang, Kuaishou’s head of ecommerce, the real revenue drivers for brands are mid-level influencers on the platform. In a recent interview, Yu said that traffic and conversion rates originate mainly from influencers with 100K - 1M followers.
The future is bright for Kuaishou
Kuaishou recently completed the largest IPO seen since 2019, raising almost US$6B and valuing the company at over US$100B. This huge cash injection will aid the platform in its battle for growth and competition with Douyin.
With Douyin becoming more crowded for sports brands, and newcomers to the platform finding it harder to increase reach and engagement, a relatively blank canvas such as Kuaishou provides further fertile ground for growth.
If sports organisations are already creating original content in China, Kuaishou is definitely a platform worth considering. Existing China-specific content can be adapted, and it gives the opportunity to connect with a huge resource of potential fans in a first-mover advantage space.
For organisations with a greater focus on monetising, it presents a great opportunity to stream directly to millions of potential customers spending regularly through the app.
For flexible and strategically smart sports clubs, brands, players and organisations, the potential is great on Kuaishou.