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TikTok rival Kuaishou files for IPO in Hong Kong

The company plans to go public to raise up to $5 billion in funds

The second-largest micro-video sharing platform’s company, Kuaishou, has filed an initial public offering to raise funds for the company in Hong Kong. It is being reported that the IPO listing could raise up to $5 billion in funds. Named as one of TikTok’s rivals, Kuaishou, received about 302 million daily active users and 776 million monthly active users in the first six months. Consequently, it climbed the revenue to $3.8 billion, a growth of 48 per cent. 

The company is backed by Tencent Holdings Ltd., and is pushing to achieve a valuation of $50 billion by the end of this year— a report by Bloomberg suggests. According to a filing on the Hong Kong stock exchange (HKEX), the company said it plans to enhance its ecosystem and contribute to strengthening research and development and technology. It aims to diversify its revenue streams through e-commerce, online games and other products and services.

If the rumours stand correct, Kuaishou’s nemesis ByteDance will be initiating its own public offering separately for TikTok and Douyin. The company plans to raise $2 billion for a valuation of $180 billion. ByteDance’s Douyin has seen steady growth as well, crossing 400 million daily active users in January. With the absence of TikTok from the global market, micro-video apps like Kuaishou have seen a favourable market condition.

The reason for companies like ByteDance to apply for an initial public offering in Hong Kong is the negative response it has been receiving surrounding TikTok globally. With the ban in countries like India and the USA, the only means to survive is to go public in a profitable but cut-throat market in China. 

Micro-video sharing apps have been popular for almost a decade now. Apps like Byte, Dubsmash and Vine were insanely popular worldwide. However, most of them did not have a very lucrative run. The micro-video blogging app market has slowly turned dense during the rise and fall of TikTok. There is no denying that TikTok has created a whole new segment in the market, increasingly using advertisements and product placements as its sizable revenue. 

In fact, the app still managed to generate a revenue of $115 million in October, most of it contributed by Douyin in China. Kuaishou’s own TikTok replica, Zynn, topped the Apple Store charts in the US for ‘most popular free app’ category in June. However, it is reported that Kuaishou’s net loss is increasing consistently. 

The Chinese market is facing dense competition with CNBC reporting rise in a popular app Bilibili whose average daily users have recently soared 55 per cent. With Kuaishou’s revenue model expansion, it competes against short-video apps like Douyin and Bilibili, gaming sites like Huya and Douyu and e-commerce giants like Taobao in China.

In the global market, every country is pushing to provide an alternative to TikTok after the ban. India has increased its production of local apps under the ‘Aatmanirbhar Bharat’  sentiments. Ever since the ban in June, many smaller versions of the popular apps started showing up on the app stores. Chingari, Mitron, Bolo Indya are some of the ones that made it on the news for a while. 

Facebook’s Instagram has shot in popularity since the launch of its in-app feature Reels. The app has received about decent 100 million active users ever since the release. Most of the TikTok influencers and users have switched to Instagram Reels to view and develop content. Despite its efficiency and attractiveness, some brands have still expressed their dismay over the platform.

With the rise in competition in the Chinese and global market, companies like Kuaishou and ByteDance are gearing up to expand and develop their products to cater to a broader audience range. The future holds the key on which company will emerge as the leader in the micro-video sharing platform market.

Anushka Shrivastava
Media student | Writer | Avid Reader

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