How Can Snap’s Chinese Counterparts Catch Up With Or Even Surpass Snap?

摘要: What's the difference between Snapchat and Meipai? What business model did Snap and its Chinese counterparts such as Meipai adopt, respectively?Can Meipai catch up with Snap one day? And how?

(Chinese Version)

Happy stories are all alike, but distinctively different to some degree.

Finally, Snap, the parent company of social network app Snapchat, went public on the New York Stock Exchange. The Wall Street demonstrated its expectation towards Snap by setting its valuation at near $34 billion. Despite slight fluctuation recently, its valuation remains higher than $25 billion, making it the envy of lots of social network-based brands. Statistics suggest that Snap’s revenue reached $400 million in 2016. Major sources of its revenue include: filters sponsored by advertisers and video ads, etc.

Meitu’s short video editing app Meipai is commonly referred to Chinese Snap. It is reported that Meitu’s revenue in the first half of 2016 reached 585.5 million. Major sources of Meitu’s revenue includes smartphone and internet service. In fact, smartphone accounted for 95.1 per cent of Meitu’s revenue in the first half of 2016.

According to Snap’s prospectus, its revenue in 2017 is expected to reach $1 billion. So how can Chinese counterparts, such as Meipai, catch up and even surpass Snap?

Snap and Meipai adopted completely different commercialization paths

Throughout Snap’s prospectus, Snap repeatedly highlighted that “Snap is a camera company”. Its Chinese counterparts, such as Meipai, prefers to call themselves “mobile internet companies”. However, they actually have similar user groups and all have much to do with photo apps. Statistics suggest that 60 per cent of Snapchat’s DAUs are 13-24 year old teenagers, while with a total MAU of 456 million (as of October 2016), major users of Meitu’s all kinds of apps are 16-22 teenagers and 22-30 year old young adults.

However, their difference lies exactly in details.

For example, 55 per cent of Snap’s users are female, while a third-party organizations’ statistics suggest that female users account for 70 per cent on Meitu. Thus, here comes some vital differences:

1. Individual-based VS Internet celebrities center

Snap’s users are highly decentralized. As of the fourth quarter of 2016, Snapchat’s DAU reached 161 million, 161 million individuals. They share their own lives and build their intersectional social connections.

In other words, Snapchat is based on individuals. In comparison, Meipai is highly centralized since it is more like an incubator for “internet celebrities”. Therefore, it is naturally a favorable platform for KOLs and people fond of performing.

For example, by uploading some really interesting and creative short videos, dance teacher Meipai user “HoneyCC” attracted millions of fans in a short time (2 million Meipai fans and 570,000 Sain Weibo fans). She was even invited to deliver a speech at the release conference of Meitu T8 smartphone. Other users who become popular via Meipai includes Luo Xiuxiu, popular joke-tellers and owners of one of the best-selling cosmetics shop on Taobao, Mr. Fu, a popular laugh-making star in the Chinese internet world from Germany, etc.

In a word, while Snapchat weaves a complete and stable social network chain, its Chinese counterparts, such as Meipai and UGC-based video platform Bilibili.com, establish one after another “internet celebrity incubator” through algorithm and tags and by discovering contents and people of better quality and worthier of discussing.

2. Others-centered (of social networking) VS Self-centered (for social networking)

Although both Snap and its Chinese counterparts (short video and live streaming platforms) rely on “hormone economy”, Snap is more about others, while Meipai is more about oneself. This reflects not only cultural difference between China and US but also difference in their product form. While Snapchat is about communicating with others (of social networking), Meipai is about recording oneself (for social networking). While Chinese’ users’ craving for social networking starts with the pursuit of beauty, Meipai best satisfied people’s needs through its all kinds of filters and tools.

In comparison, foreign young people prefers social networking apps with which they can make some really cool videos. Snapchat is born under such circumstances and skewers up people’s social networking chains through short videos. However, Chinese short video apps are more about having users record, upload and share their videos. However, no app really knows how to help strengthen people’s social networking chains.

By taking advantage of high quality contents via big data algorithm, combining hot-spot topics, getting people involved and creating even more UGC-based hot-spot contents, Meipai has successfully transformed from a tool into a short video community. Statistics suggest that average using time per day on Meipai has grown from 12.9 minutes (as of May, 2014) to 33.8 minutes (as of October, 2016).

Since the beginning of 2017, Meipai has updated a couple times, adding all kinds of new functions, including AR special effect “Cute Facial Expression” and dynamic purikura “10-second poster”. All these functions are centered around selfie and young female users. At this point, we can tell that Meipai’s priority,at least for now, is to get female users high.

Similarly, picture-based social networking app IN has also come up with the concept “UGC Center”, which means most contents used for circulation are created by users. Based on the tags users attach to their pictures and short videos, IN classifies these contents into different columns. Besides, Bilibili.com

In a word, most Chinese short video platforms focus on the weak social networking chains, since it’s too expensive to “transfer social network chains”.

3. Advertising spaces and content-based ads VS Creative ads skillfully integrated to contents

Based on Snap’s prospectus, ad is one of the major source of its revenue. More specifically, it’s about advertising spaces. However, Snapchat has been attempting to integrate ads to contents, from “Stories” to “Geofilters” and then to Discover, since advertising spaces are limited, while contents can be upgraded constantly.

Besides online ads, paid filters and special effects, internet celebrities may become the biggest source of fortune for Meipai in the future.

Online celebrities who rose into popular via Meipai, such as Papi Jiang, Liu Yang (Cary), Miao Da Xian, JoyceChu (Clover), have all drawn benefit from Meipai. Papi Jiang even auditioned for advertising space at a sky-high price, RMB 20 million.

For example, Miao Da Xian used to participate in beauty contest, work as program director for TV stations and serve as guest to large-scale entertainment shows. By integrating ads to original short videos in a creative manner, Miao Da Xian has attracted over one million fans. Some of the brands it has cooperated with includes Chow Sang Sang, Mizone, SNOW Camera, etc. In fact, its monthly revenue has reached over one million, making it a typical successful case on Meipai.

Miao Da Xian’s success lies in not only its emphasis on tags such as “Number One Female Nerve” (“Female Nerve” refers to women who often make fun of themselves), “Female Goddess of Jokes”, but also its short, creative and interesting videos, even if they turn out to be ads. This way, these SuperV users directly go pass Taobao and Baidu and are able to distribute traffic and information directly, making them the gateway to traffic in the mobile internet era. After all, they are also based on traffic, fundamentally.

From this aspect, Meipai is naturally fit for internet celebrities and KOLs who attach high importance to social influence, while Snapchat suits better in culture background where individualism is highlighted.

Two paths towards profitability: consumption upgrading as well as culture entertainment

Different from Snap, Meipai’s product logic and form determines that internet celebrities and KOLs are naturally fond of Meipai. In this case, how can platforms such as Meipai catch up with Snap?

Above all, I’d like to mentioned that in the era of mobile internet, users have to face an access of contents, while enterprises have to face the lack of attention from users. To make profit, enterprises have to attract proper attention from users.

In other words, these platforms have to stand from the point of users and help users whether save time and filter information, or kill time and entertain themselves. I shall dive into details in the following part of this article:

1. Consumption upgrading: ads, paid content, e-commerce retailing, self-owned brands, products and services

Although this may sound similar to the business model for internet products, but there’s one vital difference: the core of these platforms is to help users filter information, match needs and supply, save time. In other words, there’s one major premise for these platforms: “consumption upgrading”.

In an era of mobile internet where “being seen is being acquired”, users are highly impatient. Snap prefers sponsored lenses than bumper ads to avoid providing unnecessary information for users and hide ads.

Platforms such as Meipai, however, focuses much attention on helping users save time. Last year, Meipai carried out “Meipai College” to support, guide and nurture internet celebrities. Through offline salons and online communication, Meipai plays an active role in sharing short video producing, fans acquiring and management skills with local internet celebrities on Meipai.

During “Meipai College”’s offline exchange activity held in Hangzhou recently, Steve, head of internet celebrity operation center, Yan Chi, founder of an internet celebrity incubator, HoneyCC, popular internet celebrity on Meipai, shared their thinking and understanding of short video content management and content entrepreneurship. HoneyCC shared his experience about selling over 30,000 pairs of trousers with simply one short video at zero cost. This short video, composed of some highly difficult stunts as well as fun try-on effects and responses, carefully hid the ads, amused the audience while promoting the products at the same time.

It is worth noticing that e-commerce brands (selling especially fast decision-making products, such as books, food, maternal and infant products, cosmetics and travelling packages) can achieve profitability through integrating contents with e-commerce, on the condition that users are connected through strong links and they have trust in the content brand. Typical examples include: American internet celebrity Michelle Phan’s monthly cosmetics package, Luo Zhenyu’s book audition live streaming activity, etc.

Rumor has it that Meipai has been busy preparing a support platform for UGC-based original short video content producers to help them make more money through high-quality short videos.

After all, this might be the best era of contents such as text, knowledge, voice, appearance and talents, since they can all be turned into hard currency.

2. “Culture and entertainment”: reward, added value of VIP users and sports events guess, etc.

In this part, I shall focus my attention on reward.

Giving rewards is an ancient business model for the acting business, from ancient opera, cross talk, to street performance. After close analysis, we may find that they have four common traits: a) letting users spend time entertaining themselves; b) live interaction; c) high-quality products; d) targeting the minority.

As we can see from these platforms’ financial reports, 5 per cent of wealthy users contribute to 70 per cent of their income. To achieve mass reward model, these platforms have to perfect their reward system and custom rewards, etc. To express the unique feelings users have towards the content, producers and streamers, they have to use different types of rewards.

Last year, popular Chinese teenage band TFBOYS set a record by receiving RMB 300,000 through all kinds of rewards during a live streaming activity on Meipai. To make the reward process more interesting, Meipai added four special types of rewards: rice dumplings (representing Wang Yuan), paper crane (representing Yiyang Qianxi), little crab (representing Wang Junkai) and clover (representing TFBOYS). These rewards are a lot more effective in encouraging users to give rewards.

As a matter of fact, both popular brands such as Disney, Dior and SK-II and celebrities such as Jiang Xijian, Angelababy, Zhong Liti have conducted live streaming activities on Meipai, not only because Meipai has a large user base of young female users, but also because the quality of live streaming is getting increasingly better and fits better major brands and celebrities. Meipai, as a centralized platform in nature, is also fit for “output and spreading information”.

On the other hand, Meipai streamer NaCI Salt received RMB 1.58 million through rewards within three hours, which suggests that users have started to be willing to give rewards to talented people instead of typically good-looking female streamers. Streamers known as foodies, such as Mr. Mizi and Xiaoman, attracted 1.7 million and 1.4 million fans on Meipai simply through videos about food. This might also be the best times of internet celebrities from segment fields, such as life, social networking, etc. It is expected that high-quality streaming about dance, e-commerce, game and music will become increasingly popular on Meipai.

If Meipai could maintain its appeal to internet celebrities, it would be able to catch up with Snap, on the condition that it has a gigantic user base.

Therefore, detail is the key, indeed. Although the Chinese mobile video and beautification apps aren’t profitable, generally speaking, Meipai sets a good example by focusing on details.

It suddenly occurs to me the four chapters in the book “Winter of Peacock”: impending death, death, nirvana, rebirth. Maybe it’s high time we changed a little bit.

…………………………………

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[The article is published and edited with authorization from the author @Zeng Xiangling, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.

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