Kuaishou pulls its video app from US after failing to dent TikTok’s market dominance

05-Aug-2021 Intellasia | South China Morning Post | 7:03 AM Print This Post

Zynn, a TikTok clone that once topped the iOS App Store in the US, has been taken down by its operator Kuaishou Technology, in what is seen as an admission that the dominance of rival TikTok in the American market is too hard to beat.

“We took the initiative and removed Zynn from the US App Store. Other overseas products will not be affected… our overseas strategy remains unchanged,” the Hong Kong-listed company said in a statement on Wednesday.

Kuaishou’s shares were down 2.5 per cent to HK$105.20 at the close of trading on Wednesday, lower than its issue price. The Beijing-based company saw its share price climb as high as HK$417 in February this year.

The main domestic rival to TikTok owner ByteDance, Kuaishou has been aggressively expanding in the overseas market with Zynn for the US and Canada, the Kwai app for South America, and Snack Video for Southeast Asia.

The company budgeted $1 billion to increase its overseas user base this year and had already spent $250 million in the first three months, local media LatePost reported in June, citing people familiar with the matter.

ByteDance itself has faced major challenges after TikTok became the first Chinese social media app to claim success in the US market. In June, President Joe Biden requested a review of security concerns posed by Chinese apps after he revoked his predecessor Donald Trump’s executive orders, which sought to ban them.

Zynn, released in May last year, once reached the top spot on the iOS App Store in the US with the help of cash rewards and gift cards. By watching videos or inviting at least five friends to the app, Zynn users earned points that could be converted into cash.

However, its popularity faded over the subsequent months, and in the three months before being pulled it only ranked between 350 to 450 in the entertainment category of the US App Store, according to data provider Sensor Tower. TikTok currently ranks No 1 among all free apps in the US App Store, followed by YouTube and Instagram, according to Sensor Tower.

Kuaishou, which was one of the companies that showed an interest in buying the short video app Musical.ly which later became TikTok, has had better success in other overseas markets. Kwai ranks 16th in Brazil’s free iOS App Store while Snack Video is No 10 in Indonesia, according to Sensor Tower.

The company’s average monthly active users outside China exceeded 100 million in the first quarter and grew to more than 150 million in April this year, according to its latest earnings report in May.

Still, the growth of Kuaishou’s international apps has come at a cost, with the company’s sales and marketing expenses surging to roughly 69 per cent of revenue in the three months ended March, according to its earnings report.

https://www.scmp.com/tech/big-tech/article/3143800/kuaishou-pulls-its-video-app-us-after-failing-make-dent-tiktoks

 

Category: China

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