Readjustment of Kuaishou Management: CEO Cheng Yixiao leads Kuaishou E-commerce

 

 

"LatePost" exclusively learned that Kuaishou CEO Cheng Yixiao will also serve as the first person in charge of Kuaishou E-commerce from mid-September, and personally lead the e-commerce business department. Xiao Gu, the senior vice president of Kuaishou and former head of the e-commerce business unit, will be transferred to the head of the local life business. At the same time, Kuaishou Local Life will be upgraded to a first-level department parallel to the main site, commercialization, e-commerce, and internationalization. This adjustment shows that the importance of e-commerce and local living business has been further increased.

 

 

In 2022, the domestic economic environment will change, and the advertising revenue of most leading Internet companies will also decline sharply. Douyin and Kuaishou are exceptions. Thanks to the internal circulation of advertisements brought by e-commerce and local life, the advertising revenue of the two companies has maintained a growth of about 15% despite the contrarian trend.

 

 

 

In order to sell more products in the live broadcast, merchants and anchors will advertise on the platform to attract more people to follow the account and watch the live broadcast. Kuaishou refers to this type of advertising revenue due to e-commerce business as "internal circulation revenue".

 

 

 

 

According to "LatePost", in the second quarter of 2022, Douyin and Kuaishou's internal loop advertising revenue accounted for 40% of the overall advertising revenue. Among them, Kuaishou’s internal loop advertising revenue accounted for more than 45%.

 

 

A person close to Baidu executives said that Baidu is most envious of Douyin and Kuaishou's internal advertising revenue brought by e-commerce and local life. In 2014, Baidu fully acquired Nuomi.com to try to develop local life business, but it was unsuccessful in the end. Founded in 2000, Baidu’s advertising revenue in the first half of this year was 32.8 billion yuan, while Kuaishou, which began commercialization in 2018, has reached 70% of Baidu’s advertising revenue in the same period.

 

 

"Inner loop advertising will definitely become the core revenue growth engine of Douyin and Kuaishou in the future." A Kuaishou person said, "This also means that e-commerce and local life business will become more and more important for the two companies. " Kuaishou's executive appointment this time is also an adjustment made in response to the above trend.

 

 

Many Kuaishou people said that Xiaogu had a good reputation when he was in charge of e-commerce, but Cheng Yixiao always thought that it was not good enough. This is one of the reasons why he decided to lead the team himself, "so that we can better understand this business and find new breakthroughs." A Kuaishou person said.

 

 

According to the financial report, the four-year-old Kuaishou e-commerce GMV (transaction volume) has reached 680 billion yuan in 2021, making it the fifth largest e-commerce platform in the country. In contrast, Douyin e-commerce, which was established later, is developing faster. According to market analysts' estimates, Douyin e-commerce GMV will exceed 800 billion yuan in 2021.

 

 

"Cheng Yixiao also has a strong interest in e-commerce." The above-mentioned Kuaishou person said. He often encourages management to use Kuaishou more, experience more, and place more orders on Kuaishou e-commerce. After Cheng Yixiao is directly in charge of the e-commerce department, the middle-level managers of the e-commerce business who originally reported to Xiaogu will turn to Cheng Yixiao to report, and some of them will be transferred to local life.

 

 

Local life is similar to the business model of e-commerce, so Xiaogu, who once built Kuaishou e-commerce from scratch, is the most suitable executive to take over this new business.

 

 

Previously, Kuaishou's local life business was scattered in the main station and e-commerce business divisions. After the adjustment, Xiaogu is directly responsible for the upgraded new department, which is conducive to better leading the business forward.

 

 

 

"LatePost" learned that after this adjustment, Kuaishou's local life will change its previous strategy of light investment. Compared with the cooperation with Meituan to obtain business resources, the newly established Kuaishou local life department will officially build its own sales team, introduce business resources, and actively connect with more Douyin service providers.

 

Local life and e-commerce are the few high-frequency businesses that still have a large market space. Neither Kuaishou nor Douyin could sit by and watch these two cakes fall into the hands of others. As the two major short video platforms continue to increase investment, the long-term stable industry pattern will also change.