In 2019, the development of the internet industry enters a new stage where the competition on incremental users starts to give way to that which focuses on stock users. Accordingly, the internet platforms are expanding their competition from products and marketing to the realm of the ecosystem of creators.
For the past 30 years, the nature of the internet has never given any changes: its lifeline has been always controlled at the hands of those who are dominating in traffic.
However, for content creators of the massive amount of UGC, if a platform can provide adequate service empowerment, follower stickiness, and monetization support, it is likely able to manipulate the public opinions in this long-last competition, thereby winning the battle at the end of the day.
As a result, major platforms start to spend hugely on subsidization. For example, in platforms that rely on private domain traffic, such as Kuaishou and Tiktok, each piece of video content or content shared with photo costs 10 to 30 RMB. However, those platforms still burn their cash for subsidization, for what lays behind is a profit worth several billion USD.
The concept of private domain traffic is now attracting another wave of attention. It refers to the traffic content creators are able to control. The kind of traffic is controlled at the hands of individual users. Platforms like public accounts and circle of friends of Wechat fall under the category of private domain traffic.
In platforms that rely on private domain traffic, even with fewer followers, content creators could monetize their content by employing proper operation ways, such as giving live shows, selling goods, selling advertising spaces, and providing paid knowledge, if the followers support them, like and trust their content. Private domain traffic is more useful for middle and bottom users to monetize their content. Its strengths lie in stable traffic and controllable monetization.
Tiktok, Weibo and the likes are platforms that rely on public domain traffic. On such platforms, the traffic of the content creators is almost beyond their control and depends on the distribution logic of the platform they are in. The unstable traffic of the content and works of the creators also leads to unstable monetization.
On platforms that rely on public domain traffic, the exposure of works the creator’s post is controlled by the platforms. It could be said that their survival on the platforms is fully controlled by the platforms. Undoubtedly, content creators on such platforms feel nervous about this and wish to control the traffic of their content.
At this crucial moment before the upcoming new stage, an advertising platform called Xiangdemei (literally means enjoy the gaining of goods) found a new way. Bypassing Wechat, Tiktok, Kuaishou, and other traffic platforms, Xiangdemei brought advertisements directly to users. It gained a massive amount of traffic in a short time through subsidization and disintegration-style expansion. However, behind this is the massive spending. According to relevant resources, establishing its headquarters in China in 2016, Xiangdemei aims to play a role of giving direct links between users and advertisers. In the first half of 2019, the platform has raised nearly 100 million USD. It is not known when this amount will be used up. In addition, it will be difficult for it to become a platform that dominates the market in the future. However, before a huge profit worth billions USD, the platform is continuing its way of raising capital to subsidize its users. On July 1, the first day of the second half of the year, an internal letter from its management team revealed the ambitions Xiangdemei set for the near future. According to this letter, the goal of the platform is: by 2020, its daily active users reach to 100 million, and its advertisements cover a population of 3 billion. At present, the platform has established its first branch in Malaysia, a country which it can accommodate owing its large number of users who can speak Chinese and less cultural gap. The second branch will be established in Thailand or Indonesia. It is undoubted that Xiangdemei set a radical and ambitious goal.
Comparing with the shortest video or social platforms that rely on public domain traffic, Xiangdemei takes advantage of its strengths in private domain traffic and highlights the ecosystem of creators. The key reasons that advertising clients are interested in this advertising mode are that its strengths in private domain traffic can make them feel safer, and make the monetization easier. This profit mode has gained positive expectations in the capital market, constituting the reason why it can raise nearly 100 million USD. The value of Xiangdemei platform now is estimated to reach 3 billion RMB. During the interview, the management team told that Xiangdemei is preparing to get listed on NASDAQ in New York in the second half of the year. According to the team, there were two urgent problems that must be addressed right now. One involves its number of users. The other concerns its turnover. In case the two conditions are satisfied, the listing will become easy, enabling it to convince US investors of the potential of the platform. Currently, the team of the Malay branch is making efforts to achieve the expected number of users and turnover by subsidizing its users. When achieving the expected goals, the estimated value of the platform will reach 10 billion RMB, making it a new internet giant. If this is true, the thorough exploration of Xiangdemei in private domain traffic will open a gate for it to obtain a new wave of internet bonuses.
Company Name: Xiangdemei
Contact Person: Media Relations
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