Virtual gift giving is very important in China’s popular online streaming industry. You can send anything from your favorite live performers, from roses for 5 yuan (80 cents) to space rockets for 500 yuan. Now it’s just a symbol, but money is real, and this is what makes the fast life technology so successful.

ByteDance’s competitors have become the largest real-time streaming platform for virtual gifts, with more monthly paying users than any other user in the world. The terms of the deal obtained by Bloomberg show that the company absorbed the skills of fans to performers and raised US$5.4 billion (approximately Rs 39,409 crore) in Hong Kong, which is the largest Internet IPO since Uber Technologies in 2019.

According to the ownership disclosed in the Kuaishou prospectus, this will create at least four billionaires with a total wealth of US$15 billion (approximately Rs 10.09 billion). Bloomberg Billionaires Index shows that the co-founders Su Hua and Cheng Yixiao will each have a net worth of more than 5.5 billion U.S. dollars (approximately Rs 4,128 million).

Kuaishou, which means “kuaishou”, is one of China’s largest Internet success stories in the past decade, and is part of a new generation of startups that are booming under the support of Tencent Holdings. Together with TikTok’s parent company ByteDance, the company pioneered the development of a real-time streaming and bite-size video format, which was subsequently adopted by companies such as Facebook Inc. worldwide.

Su said in the official biography of Kuaishou published in 2019: “The key resource of the Internet is attention. It can focus on a large number of people like Sunshine, rather than just focusing on certain groups of people. This is the simple logic behind Kuaishou. “

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Su is from Hunan Province in central China. He studied computer programming at the famous Tsinghua University and then joined Google in Beijing in 2006. There, his annual salary is about 23,000 US dollars (about 16.77 million rupees), which is eight times the average salary in the country. According to Kuaishou’s biography, when he said he was “very happy,” a stay in Silicon Valley inspired him to start his own business.

The 38-year-old quit Google during the global financial crisis and started his own video advertising business, but this business did not materialize. After working at Baidu for a while, he met Cheng in 2011, and they quickly decided to pair. In 2013, the two transformed the Kuaishou app from a GIF maker to the social video platform it is today, and began to gain popularity with their live videos in rural China.

With the rise of Douyin of TikTok, ByteDance’s Chinese twin app, Kuaishou has expanded its appeal, attracting influencers supported by talent agencies and popular singers such as Taiwanese Jay Chou. In the process, it accelerates monetization by creating advertising spaces and in-app stores for brands and businesses.

Although buying virtual gifts is still a hassle, they account for nearly two-thirds of revenue, but the company is deeply researching high-margin businesses such as e-commerce and online gaming. According to the IPO prospectus, its sales increased by nearly 50% in the first nine months of last year to 40.7 billion yuan (4.59 trillion euros).

Viewers spend an average of nearly 90 minutes on Kuaishou every day, and about a quarter of monthly users also produce content. Although this strong participation differentiates Kuaishou from the live streaming platforms of competitors such as Joyy and Momo, the short video feed recently launched by Tencent’s super app WeChat has pushed the competition to another level.

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Kuaishou’s debut may also be overshadowed by the potential IPO of its larger competitor ByteDance, which has 600 million daily Douyin users more than twice that of Kuaishou. The final valuation of the world’s largest startup company was US$180 billion (approximately Rs 131.3 trillion). The United States was reportedly trying to ban TikTok and force the sale of the company last year. The company is exploring the listing of some of its businesses in Hong Kong. An application on national security issues.

Citic Securities Co. analyst Wang Guanran said in a report on January 26: “Kaishou has overhauled its products to become more similar to Douyin.” “The two will face direct competition in the future. “

Kuaishou is not immune to geopolitical tensions. Su told investors in a conference call on January 25 that non-Chinese markets are likely to become the main driver of profitability, but as New Delhi and Beijing clash over border disputes, non-Chinese markets including Kwai and Snack Video The platform and hundreds of Chinese applications are banned in India. In the US, since its launch in May last year, its TikTok-style Zynn service has gained little appeal.

The company must also deal with the recent crackdown on real-time streaming. China said in November that it would require performers and gift-givers to register with their real names, prohibit minors from tipping, and require platforms to limit the value of virtual gifts.

Despite this, investors are still eagerly seeking the first short video platform to start trading on February 5. According to IFR data, the pricing of initial public offerings is at the high end of its market range, and the retail segment is the most subscribed. As the city’s new housing market has recently become popular. Last year’s enthusiasm spurred the wealth of senior executives, including Zhongshanshan (now the richest man in Asia) in Nongfu Spring and Pan Dong, which is controlled by Blue Moon Group.

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The founder of Kuaishou is cautious about his accumulated power. In the company’s biography, Su compares its platform with the ability of “One Ring” in JRR Tolkien’s “Lord of the Rings” trilogy to control Internet attention and traffic.

He wrote: “Wearing the ring, you will feel extremely powerful.” “But in reality, the ring and power control you.”

-With the assistance of Mai Pei Yi

©2021 Bloomberg

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