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"Hello, Lao Tie!" Before November 17th, probably no one would have thought that Cristiano Ronaldo would settle in Aauto Quicker and become a member of Laotie. When international superstars meet Aauto Quicker Laotie, there is always a little unrealistic feeling.
Founded in 2011, in less than ten years, Aauto Quicker has become a force to be reckoned with in the Internet industry, but labels such as "Buddhism" and "local flavor" have been bothering Aauto Quicker.
In June 2020, on the occasion of the ninth anniversary of the founding of Aauto Quicker, when "Ollie" shouted to his uncle, "Old Tie, there is nothing wrong, we are dust in the world, but we are our own heroes", most people knew what Aauto Quicker was like in its original ecology.
In fact, since June 2019, Aauto Quicker, who has always been a "Buddhist", is tearing off his "slow label" and turning to a wolf. Aauto Quicker has been accelerating its development, launching the Aauto Quicker Extreme Edition, cooperating exclusively in the Spring Festival Evening, inviting stars such as Jay Chou and Cristiano Ronaldo to settle in and trying to break the circle.
On November 5th, Aauto Quicker officially submitted a prospectus to the Hong Kong Stock Exchange, intending to be listed on the Hong Kong Stock Exchange, which is expected to become the "first short video share". It is reported that Aauto Quicker plans to raise 5 billion US dollars with a target valuation of 50 billion US dollars.
Aauto Quicker can’t catch up with the number of users in Tik Tok in five years.
When it comes to Aauto Quicker, the topic always seems to elude its rival Tik Tok. Even on the day when Aauto Quicker submitted the prospectus, ByteDance announced that it was negotiating a new round of financing with a total amount of US$ 2 billion and a valuation of US$ 180 billion to promote the listing of mature businesses such as Tik Tok, Watermelon Video and Today’s Headlines in Hong Kong.
ByteDance doesn’t seem to be short of $2 billion. According to previous foreign media reports, the byte revenue in 2019 was $18 billion, and $2 billion was just a month and a half. Bytes of this news, is nothing more than trying to steal the limelight in Aauto Quicker, short video two giants also want to compete in the IPO.
In the first half of 2020, Aauto Quicker has 302 million DAU (daily active users) and 776 million MAU (monthly active users), making it the second largest short video platform in the world. The first is Tik Tok. By August 2020, the DAU of Tik Tok has exceeded 600 million.
Compared with Tik Tok, the development of Aauto Quicker is obviously much slower. After all, Tik Tok is a product launched five years later than Aauto Quicker. Aauto Quicker’s slowness is related to CEO Su Hua and founder Cheng Yixiao.
Cheng Yixiao, who is known as the "Zhang Xiaolong of Tiantongyuan", is not good at talking. Zhang Fei, an early investor in Aauto Quicker and Wuyuan Capital, commented on him as "a little boring". Suhua, who joined Aauto Quicker later, is also a Buddhist, and they are very restrained in product design based on the principle of "not disturbing users".
Cheng Yixiao is an idealistic product manager. When GIF Aauto Quicker was founded in 2011, Weibo’s forwarding function was very popular, so it was very easy to copy it. But Cheng Yixiao thinks that once forwarded, the head effect will be obvious, and there is no way for everyone to be seen fairly. Therefore, Cheng Yixiao resolutely does not do the forwarding function.
Like Cheng Yixiao, Su Hua is also a person who cares about fairness and equality. He once said, "Aauto Quicker does not exist for stars, nor does it exist for big V." In this way, fairness and inclusiveness became the gene of Aauto Quicker. Under such values, Aauto Quicker adopted a double-column model to increase the chances of users’ anti-election, without a content operation team, without deliberately guiding the topic of explosions, and treated users equally, without supporting a big V in the head, and even limited the flow of head videos.
Guosheng Securities reported that the decentralized distribution mode of Pratt & Whitney in Aauto Quicker determined the slow and steady growth of its users. It took Aauto Quicker six years to break through 100 million DAU, while Tik Tok only took 17 months.
Tik Tok’s philosophy and playing style are completely opposite to that of Aauto Quicker. Zhang Yiming thinks that the information of mobile Internet is exploding, and users have too many choices, so algorithms need to be involved to screen out the needed information for users. Tik Tok’s recommendation mechanism is that all newly released videos will be allocated to the initial traffic pool, and based on the activity generated by the video, the platform will conduct multiple rounds of drainage for the videos with good performance.
In the first half of 2018, Tik Tok made a breakthrough from 30 million to 100 million and then to 150 million through a large number of advertisements and promotions, and realized the process of "falling behind-tying-overtaking" Aauto Quicker. In the face of the menacing Tik Tok, Aauto Quicker’s own user growth suddenly stopped, and DAU lingered around 100 million for half a year, which made Aauto Quicker very passive.
Aauto Quicker in Buddhism became a wolf.
In the world of Internet, growth means everything. Looking at Tik Tok, Su Hua and Cheng Yixiao, who have always been a Buddhist, couldn’t sit still.
In June, 2019, Su Hua and Cheng Yixiao sent an internal letter, in which they expressed their dissatisfaction with the status quo in Aauto Quicker, believed that it must be changed, and called on all staff to enter a state of combat.
The internal letter wrote:
Behind the seemingly good numbers, we see a deep hidden danger: we are no longer the fastest team. In the process of growing up, our muscles begin to become weak and slow down, and our perception of connection with users is weakening.
Yes, we are very dissatisfied with the present situation. Loose organization, Buddhist attitude and "slow company" are becoming our label. This makes us sleepless. Since the end of last year, from the two of us, the management of Aauto Quicker has made a profound introspection and reflection.
As a result, the "K3" campaign in Aauto Quicker officially started, and the "Buddhist" Aauto Quicker turned to "wolf" and set the goal of achieving 300 million DAU before the Spring Festival in 2020, with Tik Tok as the sword.
In order to increase users, Aauto Quicker made a compromise in product design.
In August, 2019, Aauto Quicker launched the Extreme Edition, which adopted new modes such as "inviting friends to get cash rewards", "signing in, watching videos and getting red envelopes", and added a single-column big-screen recommendation mode.
According to media reports, Aauto Quicker has set its strategic direction in early 2020, namely, up and down, south and industrialization. Among them, up and down refers to the content that can be infinitely up and down according to the algorithm recommendation like Tik Tok, which enhances the sense of immersion.
In August, 2020, one year after the release of Aauto Quicker Extreme Edition, DAU exceeded 100 million. In the same month, Aauto Quicker APP upgraded to version 8.0, and the product interface has undergone the biggest change in 9 years. The mode of single-column up and down and double-column click-and-click has been introduced, and the "Tik Tok" of Aauto Quicker has achieved results. However, Tik Tok is also "Aauto Quicker-oriented", and has introduced a double-row click mode to increase the stickiness of private domain, and the two sides have infiltrated each other.
However, for the sake of user growth, Aauto Quicker paid a lot of money. In the first half of 2020, Aauto Quicker’s sales expenses were 13.71 billion, up 354.0% year-on-year. The sales expenses were mainly used for the marketing and promotion of Aauto Quicker Extreme Edition and other applications, and brand promotion. It is mentioned in the prospectus that the sales expenses will continue to increase in the foreseeable future. After all, higher user growth rate means higher valuation.
In the Spring Festival of 2020, Aauto Quicker invested 4 billion yuan to reach an exclusive interactive cooperation with the Spring Festival Gala. According to Questmobile data, the gap between Aauto Quicker and Tik Tok DAU once narrowed to 60 million on the Spring Festival Gala, but after the Spring Festival, the gap widened to 100 million. With the peak of Spring Festival traffic, Aauto Quicker achieved the goal of 300 million DAU, and Tik Tok DAU exceeded 400 million.
Since 2020, in order to change the public impression of "rustic flavor", Aauto Quicker has continuously invited stars to settle in. The biggest player in the first half of the year was undoubtedly Jay Chou. Jay Chou, who didn’t even open Weibo, settled in Aauto Quicker and conducted a magic live broadcast. Recently, Cristiano Ronaldo officially settled in Aauto Quicker. In the video, Cristiano Ronaldo greeted everyone with "Hello, Lao Tie" in Chinese.
(Source: orient securities Research Office)
In the first half of the year, the most admirable thing about Aauto Quicker’s product promotion was probably the promo "Seeing". After bilibili’s "Back Wave" promo "overturned", Aauto Quicker found Uncle Ollie to make "See", which marked "Back Wave" and made Aauto Quicker’s original content out of the circle.
Commercialization is a bit fast.
In 2016, Aauto Quicker began to explore commercialization, and it took five years after its establishment to realize it. It can also be seen that Su Huacheng and Yixiao are quite Buddhist. However, the speed of commercialization in Aauto Quicker is very fast.
From 2017 to 2019, Aauto Quicker’s revenue was 8.34 billion, 20.30 billion and 39.12 billion respectively, with a compound annual growth rate of 116.6%. In the first half of 2020, the revenue was 25.32 billion, a year-on-year increase of 48.2%. At present, Aauto Quicker is still in a period of rapid growth.
It is said that Su Hua and Cheng Yixiao reached a consensus before 2018, and divided the driving force of Aauto Quicker’s income jump into three-stage rockets, namely live broadcast, advertising and e-commerce.
At the beginning of commercialization, Aauto Quicker chose live broadcast as the main method in live broadcast and advertisement. The advantage of live broadcast is that it takes into account the content and interactive experience while realizing it. In contrast, the realization of advertising is easy to disturb users, which is not in line with company values.
In the first two years of commercialization, live broadcast revenue accounted for more than 90%. In the first half of 2020, the live broadcast revenue was 17.35 billion, a year-on-year increase of 17.0%; The average monthly paying users reached 64 million, up 33.1% year-on-year. However, the average income of monthly paying users of live broadcast was 45.2 yuan, down 12.1% year-on-year.
The revenue of live broadcast business has slowed down, and advertising and e-commerce have become new power points. In 2019, after Ma Hongbin took over the commercialization of Aauto Quicker, he made a drastic reform in the commercialization system, and opened up everything to serve advertising. In 2019, Aauto Quicker’s online marketing revenue was 7.42 billion, a year-on-year increase of 345.5%; In the first half of 2020, online marketing revenue was 7.16 billion, a year-on-year increase of 222.5%. Advertising revenue increased from 4.7% in 2017 to 28.3%.
In these two businesses, Tik Tok and Aauto Quicker are the opposite, with Tik Tok accounting for a high proportion of advertising revenue and a low proportion of live broadcast revenue. But this does not prevent both companies from making efforts in e-commerce business. The unique "old iron culture" of e-commerce in Aauto Quicker has created the "top private domain traffic" in the live broadcast industry, so that Aauto Quicker can go faster than Tik Tok in the live broadcast business.
In 2018, Aauto Quicker launched the e-commerce business, after which this business began to grow rapidly.
In 2020, the original GMV target of e-commerce in Aauto Quicker was 100 billion. However, with the entry of Tik Tok and setting the GMV of e-commerce in Tik Tok at 200 billion, Aauto Quicker quickly raised the GMV target to 250 billion. In August, 2020, the DAU of e-commerce in Aauto Quicker exceeded 100 million. In the past 12 months, the cumulative order volume of e-commerce in Aauto Quicker ranked fourth in the industry, second only to Taobao Tmall, JD.COM and Pinduoduo.
In the first half of 2020, the GMV contributed by Aauto Quicker e-commerce platform was 109.6 billion, and in 2018, it was only 97 million, an increase of more than 1,000 times in two years. The average monthly repurchase rate of users in Aauto Quicker is over 60%.
However, under such a high GMV, the income of other businesses including e-commerce is only 810 million. Based on this, the monetization rate (income /GMV) of e-commerce in Aauto Quicker is only 0.7%, which is incredible, because Pinduoduo is 3%, and Ali and JD.COM are even higher.
The positive aspect of the monetization rate of 0.7% is that there is a lot of room for improvement in the future. The negative aspect is that Aauto Quicker e-commerce has only earned shouts for the time being, and has not made much contribution to revenue.
In addition to the low monetization rate, quality problems also plague Aauto Quicker e-commerce. On November 19th, "The bird’s nest sold by Simba was detected as sugar water by Wang Hai" was posted on the hot search. Wang Hai, a professional counterfeiter, claimed that the bird’s nest sold by Simba had zero protein content, which did not meet the standard of "protein content in bird’s nest is about 30%-50%" in the quality regulations of bird’s nest.
In Aauto Quicker, you don’t have to know Viya and Li Jiaqi, but you have to know Simba. Simba, the "first brother of Aauto Quicker", boarded a hot search because of commodity fraud, which will undoubtedly have a negative impact on e-commerce in Aauto Quicker.
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