Recently, Kuaishou, one of China's leading short-video platforms, made headlines with an extensive organizational restructuringThis adjustment has far-reaching implications, as it encompasses various business lines, including the main platform, e-commerce, commercialization efforts, and community sciencesIndustry analysts view this restructuring as the most significant move for Kuaishou in 2023, indicative of a strategic shift in response to the rapidly evolving digital landscape.

A source within Kuaishou, choosing to remain anonymous, shared insights about the company's performance in certain sectors, particularly short dramas and real estateThey noted, “From an external viewpoint, our short drama and ideal home segments are performing wellIn e-commerce, we’ve seen notable changes—particularly a decrease in the contribution of top-tier streamers to Gross Merchandise Volume (GMV) while mid-tier streamers are witnessing significant growth

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This is substantially due to our internal strategy.”

The rationale behind the organizational changes is multifacetedFor starters, the restructuring reflects Kuaishou's need to adapt to market dynamics and consumer demandsThe shifting sands of the internet industry necessitate ongoing modifications to remain competitiveBy refining its organizational structure, Kuaishou aims to better integrate its resources and streamline operations, facilitating improved responsiveness to its user base.

Moreover, the adjustment also seeks to broaden the company's business horizonsAs Kuaishou refines its operational architecture, it opens avenues for increasing revenue streams in e-commerce and commercialization efforts, crucial in a market where every edge counts.

Another critical dimension of this restructuring is enhancing user experience in the face of escalating competition

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The revised organization is designed to elevate user satisfaction, an essential factor in retaining and attracting a broader audienceFurthermore, this realignment empowers Kuaishou to fortify its competitive edge against rivals.

The adjustments are also indicative of Kuaishou’s ambition in expanding its e-commerce segmentIn recent years, Kuaishou has made considerable progressThe company reported an impressive revenue growth in 2023, particularly in the first half, where adjusted net profits reached 2.74 billion yuan, with total revenue surpassing 53 billion yuanThe e-commerce GMV crossed 490 billion yuan, showcasing significant growth in a challenging marketNotably, in the second quarter of 2023, e-commerce GMV surged by an astonishing 38.9%, marking the highest quarterly growth in a year.

As for the real estate sector which Kuaishou has recently focused on, data indicates that by the end of 2022, its ideal home initiative expanded significantly throughout the country, covering over 67% of provinces and establishing over 70 deep partnerships, marking its serious intent in the real estate market

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The formation of a dedicated real estate department as part of this restructuring replaces the previous local consumption division, signaling the company’s high expectations for this sector.

Additionally, recent developments like Pinduoduo briefly outpacing Alibaba as the most valuable Chinese stock in the U.Shave spurred confidence in the short-video commerce spaceKuaishou’s strategy for the upcoming “Double 12” shopping festival aims to harness the allure of low-priced quality goods, effectively bridging content and commerce through channels tailored for special offers, which are anticipated to be pivotal for their e-commerce growth.

This restructuring dovetails with Kuaishou's new AI strategy, announced earlier this yearCEO Cheng Yixiao emphasized the commitment to advancing this agenda, which aims to position Kuaishou at the forefront of technological breakthroughs, leveraging its existing business context for sustained competitive advantage through innovative, disruptive technologies.

Internal reports suggest that Kuaishou’s advancements in AI technology are walking hand-in-hand with its organizational reshaping

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The development of the “AI Xiaokua” account is in the testing phase, representing a personalized application aimed at enriching user interactions, especially in comment-based scenariosMeanwhile, Kuaishou's language models, boasting 13 billion and 66 billion parameters, are well aligned with industry standards, showcasing their commitment to deepening engagement through intelligent content generation.

The company unveiled its “Ketu” model, illustrating Kuaishou's ambitions in the realm of visual and textual creativity, capable of generating high-quality artwork based on open-ended textual promptsThis capability is poised to strengthen Kuaishou’s content offering and enrich user experience significantly.

Industry experts like Zhang Yi underline the vast potential for AI technologies in video production and generation, positing that while expectations should remain realistic at this stage, the ongoing investment in research and development will pay dividends