Chinese short-video platform Kuaishou has recently set a target range between 900 billion yuan ($141 billion) and 970 billion yuan in gross merchandise volume (GMV), the total value of in-app purchasing transactions, for its e-commerce operations, domestic media outlet LatePost reported on Friday.
Kuaishou, China’s second largest short-video app after TikTok’s mainland version Douyin, reported 680 billion yuan in GMV last year, surpassing its annual goal of 650 billion yuan and beating market expectations.
“Aggressive brand promotion” will be the top priority of Kuaishou e-commerce division in 2022, according to LatePost, citing an unnamed source. Last year, branded goods produced a GMV of 65 billion yuan on the short-video app. Kuaishou is planning to raise the figure to 180 billion yuan this year.
The primary source of the Kuaishou e-commerce unit’s revenue is the commission it charges on transactions between consumers and merchants. According to Kuaishou’s financial report, as of the third quarter of 2021, its e-commerce business generated a GMV of 439.7 billion yuan in the last nine months, which earned the company income of 5.1 billion yuan – a monetization rate of 1.16%. As of 2019, Alibaba took a cut of 4.3% from retail transactions on its platform in China, whereas rival JD.com charged at a much higher rate of 7%, according to data by Statista.
However, Kuaishou is not planning to increase its monetization rate in the short term, as the company currently focuses on business expansion and growth, several people familiar with the matter told LatePost.
Earlier this month Kuaishou named a new chief financial officer and laid off 10% to 30% of its workforce in some departments, as the Hong Kong-listed short-video player is grappling with widening losses and shrinking market capitalization.