Slowdown in E-commerce Growth
E-commerce growth has slowed for China’s two major short video platforms, Douyin and Kuaishou, since the beginning of this year, local tech media LatePost reported on Wednesday. Nevertheless, the two content platforms have still enjoyed double-digit GMV increases of around 20% in recent months, according to the report.
Reasons Behind the Slowdown
The report quoted a source close to Kuaishou as pointing to the lack of significant expansion in its overall user base as the main reason that sales growth has dragged. Kuaishou is aware that too many advertisements could discourage short video viewers from placing retail orders in the app. The company’s commercialization head Wang Jianwei also took over the e-commerce business last November in an attempt to find the right mix of engagement and advertising.
Balancing Engagement and Advertising
Balancing engagement and advertising is crucial for the growth of e-commerce on content platforms like Douyin and Kuaishou. Overloading users with advertisements can lead to reduced engagement and lower retail sales, which is why finding the right balance is essential for sustained growth.
While Douyin and Kuaishou have seen a slowdown in e-commerce growth, their ability to maintain double-digit GMV increases indicates resilience and potential for future growth. Addressing user base stagnation and optimizing advertising strategies will be key factors in driving their e-commerce success moving forward.
