Source | Bohu Finance (bohuFN)

Author | Lin En

Recently, Douyin E-commerce, a pivotal business unit within ByteDance, has undergone significant structural reforms, culminating in the establishment of a new independent division known as 'Hongguo E-commerce'.

Hongguo E-commerce operates within Douyin's broader Chinese e-commerce ecosystem, on par with core divisions such as the Industry Products and User Products Divisions. It is specifically geared towards monetizing e-commerce opportunities within the realm of Hongguo short dramas.

It is evident that ByteDance aims to harness the immense traffic potential of short dramas to bolster its overall e-commerce strategy.

This strategic move was actually set in motion as early as 2025.

In October of the previous year, the Hongguo short drama app introduced an 'Orders' feature, seamlessly integrating with Douyin's e-commerce platform. Now, users can directly purchase 'short drama merchandise' and branded products while enjoying their favorite dramas on Hongguo, creating a seamless closed-loop experience for ordering, payment, and logistics tracking.

Prior to this integration, in May of the previous year, Douyin consolidated its content platforms by merging the short drama business development teams from both Douyin and Hongguo.

This move signifies a fundamental transformation in Hongguo short dramas' role, shifting from a mere content traffic gateway to a burgeoning e-commerce business model.

Bohu Finance believes that Hongguo short dramas' foray into e-commerce was a logical and anticipated progression.

01 Short Drama E-commerce: A Strategic Imperative for Hongguo and Douyin

In August 2023, the standalone Hongguo short drama app made its official debut. By June of the following year, its monthly revenue sharing had surpassed the '100 million yuan milestone,' reaching over 500 million yuan by March 2025. In just 23 months, its Monthly Active Users (MAU) skyrocketed from 320,000 to 210 million.

By January 2026, the Hongguo short drama app's Daily Active Users (DAU) exceeded 100 million, making it ByteDance's fifth standalone app to achieve this feat, following Toutiao, Douyin, Doubao, and Fanqie Novels.

Furthermore, QuestMobile's latest '2026 Short Drama Industry Insight Report' reveals that as of February 2026, the domestic short drama industry's MAU reached 718 million. Among them, Hongguo's free short drama app boasted over 300 million MAU, hitting 304 million, with a year-on-year net increase of nearly 140 million.

Hongguo short dramas have undoubtedly carved out a legendary status in the short drama landscape.

Hongguo short dramas adopt a free-to-watch model, primarily generating revenue through advertising. In 2025, it generated 20 billion yuan in advertising revenue. However, relying solely on advertising presents limited efficiency and imagination for monetization.

As traffic continues to surge, achieving more efficient commercialization becomes an inevitable challenge for Hongguo short dramas.

Meanwhile, the growth rate of Hongguo short dramas is showing signs of deceleration.

In 2025, the MAU growth rate of Hongguo short dramas slowed down, deviating from the steep trajectory observed in 2024. Data indicates that in March, 493 dramas were listed on Hongguo, down 83 from February, marking a 14% decrease. Total popularity reached 7.205 billion in March, down nearly 27% from February.

To sustain the 'Hongguo speed,' new avenues must be explored.

At the recent 13th China Internet Audio-Visual Conference, Hongguo's chief editor, Le Li, emphasized that emotional resonance sparked by live-action performances is the cornerstone of short dramas' long-term user attraction. Hongguo will continue to invest in and support live-action short dramas, allocating 500 million yuan in special funds to foster content innovation in high-quality live-action short dramas.

Besides refining content quality, leveraging its inherent advantages, e-commerce presents an almost inevitable path for Hongguo short dramas at this stage of development.

Moreover, Douyin also stands to benefit from Hongguo E-commerce.

According to media reports, Douyin E-commerce's Gross Merchandise Volume (GMV) growth rate has declined from 320% in 2022 to around 25% in 2025.

Competition for traffic within the Douyin app is fierce, with the rise of local life services and other businesses accelerating the division of the traffic pool.

In January 2021, Douyin's local life services business officially launched, rapidly transitioning from a trial phase to a mainstay in just a few years.

According to an exclusive report by Lei Feng Network, Douyin's local life services achieved over 850 billion yuan in total payment GMV in 2025, with a year-on-year transaction volume growth rate of 59%.

Data shows that around 80% of Douyin's local life users in 2025 actively searched for discounts, contributing to about 55% of the transaction volume.

The advent of Hongguo E-commerce can inject new users and scenarios into Douyin's ecosystem while also supplementing its user base in lower-tier markets. Douyin's users tend to be younger and concentrated in first- and second-tier cities, whereas Hongguo's users have a higher proportion of silver-haired and female users, with deep penetration into lower-tier markets, forming a complementary relationship with Douyin's existing e-commerce users.

Hongguo short dramas are indeed a 'prized asset' for Douyin.

02 Hongguo Short Dramas: Naturally Poised for E-commerce Success

The inevitability of Hongguo short dramas' venture into e-commerce is also underscored by its advantages over other short drama brands.

Firstly, Hongguo boasts a user base with a strong willingness to spend.

Among the industry's 718 million MAU, Hongguo short dramas account for 300 million.

Middle-aged and elderly users constitute the primary demographic, with 28% aged between 45 and 54 and 25.4% aged 55 and above. Female users make up over 60%. This means Hongguo short dramas possess a highly consumption-capable user base, consisting of affluent and leisurely silver-haired users and females with high consumption intention.

These users also exhibit high engagement, averaging over 125 minutes of daily app usage. Hongguo E-commerce has access to a vast pool of high-quality users.

Secondly, short dramas offer highly persuasive product placement scenarios.

Hongguo E-commerce identifies clothing and accessories worn by characters in dramas, providing a 'search for similar items' function. Users can be naturally 'inspired' by the outfits in the drama and make purchases without interrupting their viewing experience.

In this scenario, products become an integral part of the story. Viewers, immersed in the drama, are moved by the plot and characters, purchasing products with stronger emotional connections rather than just impulse buying during live streams or video browsing.

According to reports, Douyin E-commerce's return rate is around 30% to 40%, while the return rate for searching for similar items is relatively lower.

The influence of short dramas in inspiring purchases has been validated. In 2023, KanS released 22 short dramas. That year, KanS achieved explosive growth on Douyin, with annual revenue reaching 3.09 billion yuan, a 143.8% increase from 2022. By investing in short dramas, KanS attracted many young consumers, especially female users in third- and fourth-tier cities.

Furthermore, Hongguo short dramas are backed by ByteDance's mature ecosystem. Douyin's e-commerce resources, management systems, and logistics capabilities can all be leveraged by Hongguo E-commerce.

According to reports, Douyin E-commerce's payment GMV reached around 4.3 trillion yuan last year, growing by over 25%. This year's target is 5.2 trillion yuan, a 20% year-on-year increase. Industry insiders believe that with this scale and growth rate, Douyin will soon claim the top spot in Chinese e-commerce.

However, Hongguo short dramas' foray into e-commerce does not guarantee a smooth journey. Most directly, Hongguo E-commerce is essentially a form of content-driven commerce, placing high demands on the quality of short drama content. At the very least, flooded themes and vulgar aesthetics will struggle to sustain a long-term path for short drama commerce.

Moreover, the issue of slowing MAU growth for Hongguo short dramas cannot be directly resolved through commerce. The slowdown also serves as a market warning about content quality.

Ultimately, regardless of whether Hongguo short dramas venture into e-commerce, content quality must remain the top priority.

Hongguo short dramas' entry into the e-commerce arena was expected, but how much growth it can sustain in the future remains to be seen.

References:

1. TopKlout: Hongguo Short Dramas Enter E-commerce

2. Stream Media Net Official Weibo: After Reaching 210 Million MAU, How Will Hongguo Sustain the Short Drama Legend?

3. Sina Finance: Hongguo Short Dramas Exceed 300 Million MAU: Douyin E-commerce Undergoes Structural Adjustments, Establishing 'Hongguo E-commerce' Department

4. Dongge Interprets Business: E-commerce Emerges from Short Dramas: Can Hongguo Break the iQIYI, Youku, Tencent Video Curse?

5. DataEye Short Drama Observations: March Short Drama Update: 122,300 Short Dramas in Circulation, Tinghua Island, Huahua Family, Feixing Qingzhou, and Gangganghao Film and Television Lead on Hongguo

6. Xiangxianzhi: Douyin E-commerce Growth Slows, ByteDance Prepares to 'Exhaust' Hongguo

7. Yibang Power: Is Brand Spending on Short Drama Marketing Worth It? A Set of Data to Help You Quickly Understand

8. Xiaguang Society: ByteDance: A 'Fake Fall' in Profits

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