Chinese short video platform Kuaishou has undertaken an organizational restructuring in recent weeks after setting up a new management committee in early August.
Why it matters: Kuaishou’s latest reshuffle, one of a number of organizational adjustments the company has made over the past year, reflects the firm’s emphasis on e-commerce and local life services as major avenues for new growth.
Details: CEO Cheng Yixiao will lead Kuaishou’s e-commerce unit from mid-September, in a sign of this sector’s growing importance within the company. The Douyin rival has also upgraded its local life services unit, carving it out as an independent business department and placing it under the leadership of Xiao Gu, Kuaishou’s senior vice president and former head of the e-commerce sector.
- The internal adjustment will also see Kuaishou increase the operating budget for local life services, according to Chinese media outlet LatePost, with the newly established department set to build its own sales team and actively approach more service providers as it looks to compete with Douyin.
- Kuaishou’s e-commerce GMV reached RMB 680 billion ($97 billion) in 2021. Caixin previously reported that the company set a 2022 GMV target of RMB 900 billion, but reached just RMB 366.3 billion in the first half of this year.
- Overseas business is also now a priority for Kuaishou, after the company created a new department for international commercialization in March. Local media outlet Jiemian reported last week that the department has divided overseas markets into three tiers, with the top tier occupied by Brazil and Indonesia, countries where Kuaishou has the largest daily active user numbers outside of China.
Context: Advertising revenue generated by its e-commerce business has allowed Kuaishou to grow its income despite a sluggish macro environment in which most Chinese internet companies have seen a sharp decline in advertising.
- As China’s economy slows, Kuaishou is also focusing on commercialization and attracting local advertisers in Latin America, Southeast Asia, and the Middle East, largely avoiding European and American markets where TikTok is dominant.