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China's Short Video Market Peaks with 300 Million Users Lost

AInvestThursday, Jan 2, 2025 9:35 am ET
1min read

China's short video market, once a hotbed of exponential growth, is now showing signs of saturation. The total number of users for short video apps reached 1.05 billion by the end of June 2024, a significant drop of nearly 300 million users from December 2023, according to a recent report. This decline marks the first contraction in the sector, signaling a pivotal moment for the industry.

According to Ma Shicong, an analyst at Analysys, "Whether user numbers decrease or stabilize, the industry has reached its high-water mark. Overall growth will inevitably slow for all players."

To address stagnation, short video platforms are redirecting efforts toward niche sectors and technological innovation. Ma highlights areas like short dramas, AI video tools and group live streaming as key contributors to the sector's modest growth in 2024.

Monetization Becomes Priority

Analysys data shows that the total number of short video users on the mainland inched up to 1.059 billion by the end of November, a figure nearing the total number of Chinese internet users.  This near-saturation leaves little room for further user acquisition, forcing platforms to shift focus from expansion to monetization strategies.

As user growth stalls, platforms like Douyin and Kuaishou are experimenting with new revenue streams to stay competitive. Douyin began testing paid content offerings in late 2023, while Kuaishou launched a monthly subscription service for its AI assistant Kling in August 2024. These moves represent a broader industry trend of enhancing monetization capabilities through value-added services and premium content.

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