China’s second-largest short-video platform, Kuaishou, has set an annual target to have livestreamers on its platform sell merchandise worth RMB 250 billion (USD 35.2 billion) in 2020, 36Kr reported on Wednesday, citing sources who wish to remain anonymous.
The figure is a sizeable hike from its original 2020 target of RMB 100 billion (USD 14 billion) in gross merchandise volume (GMV), and comes after Kuaishou learned that Douyin, China’s largest short-video app, set a yearly annual target of RMB 200 billion (USD 28.2 billion) in livestreaming e-commerce GMV, said 36Kr, without revealing how Kuaishou got access to the information.
Douyin is similar to TikTok, another app owned by its parent ByteDance and used by people outside of China.
The new amount would well overtake Kuaishou’s 2019 final result of about RMB 35 billion (USD 4.9 billion) of GMV via livestream. Currently, livestreamers on Kuaishou sell goods worth RMB 400 million (USD 56.4 million) daily on average, which means the company can achieve just RMB 150 billion (USD 21 billion) based on the current performance. The company needs to ramp up efforts in the remainder of this year to meet the RMB 250 billion target, a person with knowledge of the matter told 36Kr, who requested that they remain anonymous.
Kuaishou has not replied to KrASIA‘s request for comment. ByteDance, the owner of Douyin, declined to comment when contacted on Thursday.
Competition between these two companies comes as the COVID-19 pandemic is shifting consumers’ purchasing habits from brick-and-mortar stores to online platforms, where livestreaming is largely viewed as an essential channel for marketing.
Read More: Short-video platforms jockey for pole position as entertainment and lifestyle brands transition online
Luo Yonghao, the founder of Chinese smartphone brand Smartisan who has faced a raft of financial difficulties, sold more than RMB 110 million (USD 15.5 million) worth of goods, including gadgets, snacks, and even laundry pods during his first e-commerce livestream on Douyin, KrASIA reported in April.
Unlike Luo, who found immediate success on his maiden stream, Dong Mingzhu, chairwoman of Chinese home appliance manufacturer Gree Electric (SHE: 000651), experienced a relatively lackluster debut. In her first livestream last April, she sold just USD 31,900 worth of goods on Douyin. However, upon moving her second attempt to Kuaishou, she managed to sell RMB 310 million (USD 44 million).
Before Luo and Dong’s entry into this new arena of livestreaming e-commerce, the market was about RMB 300 billion (USD 42.3 billion) in 2019, according to a report from Commercial Merchants Securities. Citing sources with knowledge of the market, 36Kr reported that Alibaba’s Taobao Live was the largest player in terms of GMV last year, with RMB 200 billion to RMB 250 billion (USD 28.2 billion to USD 35.2 billion) in sales.
As Douyin and Kuaishou compete for livestreaming viewers and purchases, these two companies are also going head-to-head in the courtroom, suing each other for unfair competition.
In a lawsuit disclosed in May by a Beijing court, Kuaishou alleged that searching for their brand name on the 360 Mobile Assistant app store, a major store in China, leads to a paid ad for Douyin as the first result, rather than its own app, Nikkei Asia Review reported on Wednesday. Kuaishou argues that the purchase of its brand keyword by Douyin amounts to unfair practices.
In a separate lawsuit, Douyin is suing Kuaishou for similar paid search practices it alleges are unfair, Nikkei added.
36Kr is KrASIA’s parent company