Fun-filled e-commerce boosts consumption

Short videos are seeing explosive growth in China. Data from the ASKCI Consulting Co showed China's short video market increased 110.6 percent year-on-year to 11.33 billion yuan in 2018.

China counted 353 million short video users last year, accounting for about 50 percent of the country's overall online population.

Entertainment and social interaction are the main functions of short videos, and along with the commercial use of 5G technology in the future, the online audio-visual industry will usher in a historic opportunity to make a breakthrough, said Zhou Jie, deputy secretary-general of the China Netcasting Services Association.

Kuaishou has become especially popular among small retailers and farmers in rural areas. Some of them sell local agriculture products via Kuaishou. More than 16 million people in rural areas received incomes through the platform in 2018, among whom about 3.4 million people came from national-level poverty-stricken counties, according to the company.

Chen Sinuo, vice-president of Kuaishou, said the short video platforms enable users in rural areas to gain attention from the public, showcase their lives and have a sense of recognition and pride in their own identity.

Moreover, Kuaishou has announced it will increase investments by up to 10 billion yuan to facilitate data flows for its 100,000 premium content creators next year. It plans to cover more than 20 fields such as games, fashion, sports and music, as part of a broader drive to speed up monetization.

"Last year, more than 16 million content providers earned over 20 billion yuan in income, which mainly came from advertisements, livestreaming videos, e-commerce and paid content on our platform," said Ma Hongbin, senior vice-president of Kuaishou.

According to a report by Chinese microblogging site Sina Weibo and consulting firm iResearch, internet celebrities have more diversified ways to boost their revenues, with considerable growth in product endorsement, advertising, online tipping, and paid subscription services.

The percentage of online celebrities who signed up with advertisers increased from 23.1 percent to 57.53 percent in 2018.

"The internet celebrities hope to increase their fans via short video platforms. The combination of short videos with live-streaming is an effective method to engage potential clients and drive online sales," said Cao Lei, director of the China E-Commerce Research Center.

Cao said China's internet celebrity economy is booming, and short video platforms have stepped up efforts for monetization. They are expanding collaborations with current e-commerce sites.

"However, it is harder for short video platforms to attract an increasing number of users," Cao said. Maintaining the growth of data traffic in the future is crucial for these platforms.

Zhang Xintian, an analyst from iResearch, said cooperation between short video platforms and e-commerce platforms is an explosive commercial model as the former can drive online traffic to the latter. Short video platforms could build their own e-commerce platforms and logistics infrastructure in the future, he said.

Sun Jiashan, a researcher with the Chinese National Academy of Arts, said there is a lot of potential for e-commerce aspirations of short video platforms. "The introduction of professional multi-channel network operators and paid knowledge services will generate profits for the short video industry," Sun said.