Shares in China’s largest TikTok group are collapsing due to growing fears

The share of ByteDance’s main competition in China fell after the company’s losses grew sharply on the growing signs that users in the country are spending less money on their travel services.

Kuaishou’s short video is facing stiff competition from Douyin’s ByteDance, a TikTok brand in China, and online shopping groups such as Alibaba and Pinduoduo who are also selling commercials through broadcast.

Shares of the company fell nearly 11.3% in Hong Kong on Tuesday, removing $ 14bn from the Kuaishou market price. Kuaishou’s original offering, sponsored by China’s Tencent Internet Group, raised more than $ 5.4bn in February.

Kuaishou’s results come as Beijing revisits the country’s technical sector. The company is one of only three technical groups to be informed resolving anti-competition systems. Authorities have also enacted new laws to improve it content and reducing the number of movies.

Kuaishou earns a large portion of his income by taking the money that users pay to wash small gifts for those who flock to them, such as beer stickers (Rmb1.5) or “golden bears” (Rmb1,400).

519.8m

Kuaishou users monthly

Four years ago, it earned 95% of its revenue in this way but in the three months to March, such consumer losses fell 20% per year. Gift sales accounted for only 42.6% of total quarterly revenue, according to a report by Kuaishou on Monday.

The growth of the corporate advertising business helped to reduce the decline, earning a share in 161% per annum. Advertising accounted for 50.3% of total revenue for the quarter.

Kuaishou’s total revenue increased by 36.6% annually in Rmb17bn but sales of all three of his businesses came to Bernstein’s research teams. The omission was particularly acute for businesses affiliated with the Kuaishou ecommerce business.

The company’s losses grew to Rmb7.3bn ($ 1.14bn) a quarter, up from Rmb5bn last year.

The figures obtained prompted Wall Street banks including Morgan Stanley to reduce their share in Kuaishou. Researchers at Morgan Stanley said Kuaishou’s inflation rate, huge year-over-year losses, and inflation are contributing to inflation.

Internet retailers, which use the internet for all-inclusive use, have been growing in China because the Covid-19 epidemic means consumers are staying at home and buying their phones.

But competition with Douyin, Alibaba, Pinduoduo and JD.com is fierce.

A scholar from Bernstein wrote: “We are still very much on the lookout for Kuaishou e-commerce.

Bernstein also mentioned the money Kuaishou sells and advertises, which makes up 69% of the revenue. The research team estimates that the amount Kuaishou paid for each new user has increased to Rmb65 per user at this time, from Rmb55 in the fourth quarter.

Kuaishou says he is wasting money on what he is doing. Consumers per month reach 519.8m per quarter, up from 495.0m a year ago.