In the past few days, Zhong Shanshan's call to Zhang Yiming has gone viral.

Zhong Shanshan's words were stern, demanding the platform to immediately delete the harmful and defamatory information and to apologize.

Unexpectedly, instead of a response from Zhang Yiming, relevant departments issued a warning to KuaiShou.

Zhong Shanshan called out Zhang Yiming, but before Douyin could respond, Cheng Yixiao felt somewhat embarrassed.

According to the National Cybersecurity Reporting Center, recently, in response to issues such as illegal information in KuaiShou's short videos, public security organs issued a warning to KuaiShou in accordance with the Cybersecurity Law of the People's Republic of China.

Faced with this embarrassment, will Cheng Yixiao just "smile it off"?

What exactly did KuaiShou violate?

The notice revealed that KuaiShou failed to promptly handle information prohibited by law and administrative regulations from being published or transmitted, and inadequately implemented the youth mode, leading to the spread of illegal information and harming the physical and mental health of minors...

This violation is not serious, and the penalty is just a warning. However, it is indeed worth paying attention to as it endangers the physical and mental health of minors.

01

The content chaos on KuaiShou is no less than online bullying

KuaiShou's spread of illegal information, which harms the physical and mental health of minors, is similar in nature to malicious defamation of Zhong Shanshan, and may even be more serious.

Putting it mildly, the large amount of inappropriate content on the platform is a failure in content governance. More seriously, what's the difference between this and online bullying or defamation of Zhong Shanshan? Is the platform's youth mode just a facade? Is there any difference between publishing illegal information and poisoning youth compared to cyberbullying?

Moreover, this is not the first time this has happened.

In July this year, the Xigu Cyberpolice Weibo account posted that searching for "password room" on the KuaiShou app yielded many results related to borderline content. In some video clips, live streamers were frantically testing the limits of inappropriate and vulgar content.

The KuaiShou platform is not just about so-called "borderline videos".

Also recently, the Cybersecurity Team of the Public Security Sub-Bureau of Shuocheng, Shanxi Province, discovered and investigated a case of vulgar live streaming using obscene language on the KuaiShou app's live streaming platform during routine online inspections.

It is reported that the live streamer in question used obscene language to interact with viewers through live streaming on the KuaiShou platform, attracting a large number of netizens to watch. This not only violates social morality but also breaches relevant regulations and poses a potential risk to the health of adolescents.

In addition, there are many "ghost fire youths" on KuaiShou. What are "ghost fire youths"? Aren't they just misguided and easily incited teenagers?

Therefore, the presence of inappropriate content on the KuaiShou platform is not a new issue.

In September this year, KuaiShou issued an announcement stating that during inspections, the platform found that individual users had published fabricated and harmful information, riding on trends, and inciting Sino-Japanese confrontation, severely damaging the online ecological environment... A total of over 90 related Violation of regulations accounts were handled.

Wow, it's one thing to maliciously hype traffic and play it close to the line, but to incite Sino-Japanese confrontation is another matter entirely.

As a content platform for the general public, KuaiShou's poor content governance can be attributed to two main reasons: 1. Compared to the content ecosystem and user base, the platform has not invested enough resources in governance. 2. Governing the content ecosystem is not cost-effective at this stage.

During the rapid growth phase of content platforms, making significant efforts to rectify the content ecosystem yields low returns.

Whether it's borderline content or content with a sensational or inflammatory nature, it objectively conforms to the laws of information dissemination. Simply put, it generates traffic.

In today's world, as long as there is traffic, it doesn't matter if it's borderline or harmful to teenagers. With traffic comes commercialization and monetization through advertising. KuaiShou also has something to say about this: Why do teenagers watch KuaiShou? Isn't it because you parents can't control them?

To put it bluntly, it's easy for the platform to pass the buck.

Therefore, this problem is almost unsolvable at this stage unless the platform's compliance costs are increased. If content is harmful to minors and repeated offenses occur, harsher measures may be needed to solve the problem.

02

KuaiShou, which "poisons" young people, sees growth potential in the elderly

According to Tianyancha APP's financing history, KuaiShou Technology went public in February 2021 with a market value of HK$1.4 trillion. Three years after its IPO, KuaiShou's share price has fallen from over HK$400 to HK$44.30 (closing price on November 22).

Some analysts believe that changes in the market value of internet companies reflect, to a certain extent, changes in their growth potential. After all, growth value is one of the core values of internet companies in the secondary market.

What is the growth potential of KuaiShou? This is a question worth discussing.

In terms of traffic, the 700 million user base may have gradually reached the upper limit of the internet traffic pool.

The second-quarter report last year showed that KuaiShou had an average MAU of 673 million and an average DAU of 376 million, with year-on-year growth rates of 14.8% and 8.3%, respectively. The average daily usage time per user was 117.2 minutes, with an average daily interaction volume of 8 billion.

Compared to this year's third-quarter report, DAU was 407.5 million and MAU was 714.1 million. In just over a year, monthly active users increased by about 41 million.

At first glance, an increase of over 40 million monthly active users is not insignificant, especially in today's internet industry with limited growth. However, considering KuaiShou's traffic value and future growth potential, this growth rate may not be ideal.

Especially from a commercialization perspective, it is questionable how much commercialization increment these new monthly active users can bring.

Wanlian LatePost once calculated that the average order value on KuaiShou's e-commerce platform is about 50-60 yuan, compared to about 90 yuan on Douyin, 120-150 yuan on Taobao and Tmall, and 200 yuan on JD.com. Although the specific figures may not be entirely accurate, they do align with people's overall impression of KuaiShou users' purchasing power.

Therefore, to increase commercialization space, either new user groups or new business scenarios need to be identified.

In terms of new businesses, these include local lifestyle services and further developing e-commerce operations.

For KuaiShou, user engagement and retention are crucial assets for entering the local lifestyle services market. Therefore, how to retain users' consumption within the platform may be a challenging issue.

In reality, the core demographic for local lifestyle consumption is young people in cities above the third tier. How much overlap is there between this group and KuaiShou's user base? Can it support future growth in the local lifestyle business? More importantly, how can an offline supply system similar to that of Meituan be established?

These are all challenges.

From a more feasible perspective, instead of seeking incremental growth in local lifestyle services, it may be more effective to tap into the value of the silver economy.

In terms of user demographics, for KuaiShou, finding incremental growth does not mean competing with Douyin or Bilibili for users, but rather tapping into the new traffic pool of senior citizens.

On the one hand, the platform's tone cannot be changed overnight. On the other hand, an aging society is a major trend, and there are new growth opportunities within the silver economy.

Tapping into the senior citizen traffic pool primarily involves compliance issues.

Additionally, there are some unscrupulous live streamers who specifically target elderly users. During last year's 315 event, live streams featuring "melodramatic" performances that deceived elderly people were exposed.

In reality, most elderly people are easily influenced by emotions and do not think independently like younger people, which leaves some room for unscrupulous live streamers.

Based on my own experience, every time I return home, the elderly in my family watch "scripted" live streams on their phones. Although some of these contain messages promoting correct values, others are inflammatory and deliberately create confrontations.

So, how should the platform address these issues? How should it guide proper commercialization and product promotion? In fact, we have reached a critical juncture where these issues must be resolved.

Not only KuaiShou, but also other content platforms that aim to kill time will inevitably face the dilemma of balancing content governance and traffic growth.

Fundamentally, for all content platforms, there is an inverse relationship between killing time and earning money. Users come to the platform to consume content, while commercialization compresses content and forcibly takes away users' attention.

Therefore, for a platform to commercialize, its content must meet the diverse needs of users. However, the best commercialization strategy for a content platform is balanced commercialization that finds an appropriate equilibrium between growth and monetization.

Over the past few years, KuaiShou has been emphasizing commercialization, such as developing its e-commerce business and entering the local lifestyle services market. However, platform governance also needs to be further improved.

After all, as the platform covers an increasingly diverse audience, it bears greater responsibility. Just like the line from the movie: "With great power comes great responsibility."

After all, 700 million users spend two hours a day on KuaiShou. Among these users may be our own siblings, parents, and loved ones.

Disclaimer: This article is based on the company's legally disclosed content and publicly available information for commentary. However, the author does not guarantee the completeness or timeliness of this information. Additionally, the stock market involves risks, and investors should exercise caution. This article does not constitute investment advice, and investors must make their own judgments regarding investments.