Kuaishou Reorganizes Overseas Business, Sets up Commercialization Teams in Brazil and Indonesia

Kwai, the international business arm of China’s Kuaishou, a short video platform, and has been in operation for over five years, is facing more challenges than ByteDance’s TikTok, which has more than 500 million daily active users (DAUs), Jiemian News reported on September 16. After the departure of Qiu Guangyu, the former head of the international business division, Kuaishou’s overseas business structure was adjusted. A separate international commercialization department was set up within the division to boost revenue.

Kwai has had multiple leaders over the past five years. In March this year, Qiu Guangyu, the former head of the international business division, announced his resignation for personal reasons. In August, Ma Hongbin, formerly head of Kuaishou’s commercial business, became head of the international business division.

In fact, since the second half of 2021, Kuaishou’s overseas strategy has transited to a more streamlined operation, shrinking its investment in non-core areas and integrating products like Kwai and SnackVideo. It has started several commercial realization attempts in Latin America, Southeast Asia, and the Middle East.

After the restructuring of the international business department, Cheng Yixiao, CEO of Kuaishou, put forward the goal of determining the phased, regional and differentiated strategy to find the space for the long-term and stable development of its overseas business.

After the establishment of Kuaishou’s international commercialization department, the overseas market was divided into three levels. The first level, in Brazil and Indonesia, is where Kuaishou has the largest DAU and has set up commercialization teams. The second tier is the region where DAU growth is relatively fast. Kuaishou generates commercial revenue through exclusive overseas authorized agents. In the third tier, Kuaishou only cooperates with third-party companies to boost traffic.

The focus of Kuaishou’s international commercialization has avoided markets such as Europe and the United States where TikTok is currently dominant. Zheng Yanxiang, head of Kuaishou’s international commercialization business, said the company has identified Brazil and Indonesia as priority areas for its commercialization efforts, taking into account factors such as the size of local users and the market’s acceptance of short videos.

At present, Kuaishou has explored commercialization in overseas markets. In the second quarter, Kuaishou’s total overseas revenue more than doubled from the previous quarter to 103 million yuan ($14.7 million). Operating losses narrowed significantly to 1.606 billion yuan from 4.368 billion yuan in the same period of 2021.

Currently, Kuaishou’s advertising revenue in Brazil and Indonesia comes mainly from Chinese companies with overseas demand but the company is strengthening its local commercialization team to expand its reach to advertisers in these two countries. Zheng said the company hoped that in the future, local businesses in Brazil will account for 70 to 80 percent. Kuaishou is ready to invest in overseas markets for the long haul, hoping to find a balance between commercialization and user experience.

SEE ALSO: Kuaishou Revamps Push Into Targeted Overseas Markets

Kuaishou’s e-commerce business has also undergone adjustments. According to LatePost on September 16, Cheng Yixiao will take on the role of director of Kuaishou’s e-commerce from mid-September. Xiao Gu, senior vice president of Kuaishou and former head of its e-commerce division, will be transferred to head of its local life business. At the same time, Kuaishou’s local life division will be upgraded to the same level parallel to the main station, commercialization, e-commerce, internationalization and other businesses.

Xiao Gu became head of the e-commerce business after joining Kuaishou in 2019. A number of insiders said that although Xiao’s operation on e-commerce has been going well, Cheng thinks it is not good enough, which is one of the reasons Cheng decided to lead the team himself.

The change shows the growing importance of e-commerce and local life businesses. The four-year-old Kuaishou e-commerce platform’s gross merchandise volume (GMV) has reached 680 billion yuan in 2021, making it the country’s fifth-largest e-commerce platform, according to its financial report. Kuaishou e-commerce has also set a target of 900 billion yuan GMV this year.