On the evening of January 20, mobile social platform Mico announced through its official WeChat public account that it had merged with live streaming app Kitty Live. In the announcement, Mico said that live streaming can enrich the content consumption form of the platform, increase user activity, create a community atmosphere, and increase revenue; conversely, Mico's accumulation of social relationships can also help improve the stickiness of live streaming users and the retention rate of products.
For China, the above two names sound very unfamiliar, Baidu search results are not many, Kitty Live does not even have its own official public account. However, in the circle of mobile Internet going overseas, the two are considered veterans.
Overseas entrepreneurship is becoming increasingly popular. What does the merger of pioneers Mico and Kitty Live mean, and what kind of inspiration can it bring to later entrepreneurs?
Company Introduction:
Mico founder Zhang Qinglai has participated in the overseas distribution of games such as Happy Farm, antivirus tools, and website navigation since 2009. The app was launched in February 2015, claiming to have more than 30 million users and "ranking in the top 5 of social rankings in more than 60 countries." The product promotes the concept of "making friends with people from all over the world", combining functions such as "discovering" people around you, "roaming" the world, circle of friends, and chatting, and charges users for privileges.
Kitty Live was launched in Thailand in July last year, and later expanded to other Southeast Asian countries, the Middle East, Latin America, Japan and South Korea. In half a year, the global download volume reached 10 million times, and the number of active users reached 1 million (public data in January). The founder, Sean Su, was the international marketing director of ZTE. In 2014, he presided over the launch of the Southeast Asian PC live broadcast application within ZTE. Currently, Kitty Live is a show mode, with contracted anchors from performing arts companies and amateur anchors, and the current profit method is to share rewards.
1+1>2?
Compared with the rounds of rumors and denials that domestic Internet companies are accustomed to, the news of this merger seems spontaneous and sudden.
The two had little interaction before the merger. According to the announcement, the matchmaker was Chiz City CEO Liu Chuncheng. An industry insider told Ebrun that Liu was a common investor, but the statement has not been confirmed by Liu. Public information shows that a month ago Kitty Live announced that it had received a US$21 million Series A investment from Chiz City; Mico's last round of financing was a US$30 million Series A in 2015 from a "well-known investment institution." There is a speculation that the "well-known investment institution" is Chiz City itself. Mico has not raised funds for a year, and Kitty Live just happens to have sufficient cash flow. Of course, there are other possibilities.
However, for the two startups, chasing the future is much broader and more profound than dwelling on the past. What will the merger look like? The announcement stated that "the personnel integration of the two companies has been completed, and the existing business development has been stable during the integration period", but did not specify whether the products will be merged into one or exist separately. On Lagou.com, Mico intensively posted 40 job openings from February 4 to February 6, involving engineers, designers, customer service, operations, marketing, administration, etc. Ebrun Power Network did not search for Kitty Live's recruitment information.
It is clear that the goal of the joint effort is to combine Momo-style social networking and live streaming. One applicant said that the interviewer introduced the company's products as "We are Momo". In the announcement, Mico said: "In the domestic mobile live streaming war, Momo unexpectedly became the big winner, which also indirectly confirmed the judgment that 'no social networking, no live streaming'."
On the one hand, as one of the hottest words in Internet entrepreneurship last year, after the baptism of the past year, the graftability of live broadcasting has basically become an industry consensus, and players in education, tourism, games, e-commerce, etc. are all chasing after it. Different products have the potential to use the interactivity, entertainment, and synchronicity of this tool to establish an absolute advantage over competitors and raise the industry's competitive barriers, provided that they solve the cost of funds and broadband and clarify their own positioning. On the other hand, the simple and crude traffic model of early show live broadcasts is difficult to truly retain users, which is not conducive to commercial realization based on user volume or more complex territory expansion. Especially in the case of perfect competition, live broadcast players who grasp both traffic and relationship chains can go long-term.
This is not the first time that social media and live streaming have come together. Weibo has opened up its live streaming function, acquired live streaming apps, and has been working closely with Yixia Technology (Miaopai, Xiaokaxiu, and Yizhibo).
(Yizhibo embedded in Weibo)
Take Weibo and Yixia Technology as examples. The former provides capital, traffic and celebrity resources, and leverages the latter's technology and product capabilities in short videos and live broadcasts to tap into new user growth in the mobile Internet era. The annual report shows that as of December 2016, Weibo's active user base exceeded the total of the apps ranked 2nd to 9th, and the 14-day retention rate of newly installed users was the highest in the industry, with a high-value user ratio of 76.3%. At the same time, Yixia Technology has grown into a giant with a valuation approaching $3 billion.
Theoretically, the physical combination of Mico and Kitty Live is expected to bring about a breakthrough in traffic and relationship chains, but what about the actual chemical reaction? The last well-known "merger" in the field of live video broadcasting took place in the summer of 2013. A four-person GIF animation production team and a seven-person social e-commerce product team gave birth to Kuaishou, the fourth largest social platform with 400 million users. The evenly matched team, the complementary personality and ability of the founders, the fit between product concepts and values, the accurate judgment and persistence of the market direction, and various factors including contingency have created today's Kuaishou, and also implicitly show the difficulty of copying to later comers.
Stories from the overseas circle
The special identities of Mico and Kitty Live facing the overseas market also make this merger to a certain extent reflect the changes in the landscape of overseas players.
(From left to right: China, Japan, South Korea, Indonesia, Thailand)
In 2016, the domestic live broadcast market was scrambling for space, and the situation outside the firewall was also surging. In the list of user activity of video live broadcast applications (November 2015 to October 2016), four of the top ten in Thailand were vertical live broadcast applications. Three of the four were of Chinese origin, including Kitty Live, and the remaining one had an exclusive partner from China.
Generally speaking, overseas emerging markets are generally two to five years behind China and the United States. As some areas of the domestic Internet industry have become a red ocean or even a bloody ocean, and the network infrastructure in emerging markets is becoming increasingly mature, excess production capacity will naturally flow to overseas markets that also have demand but have not yet seen oligopoly. A rough inventory shows that there were dozens of live streaming applications that were active overseas last year, including, 17,,, Bigo Live, ItsMe, Meme, VOOV (the last five were just established last year), etc. Some of them are also supported by domestic giants such as Baidu, Inke, LeTV, YY Joy, Tencent, etc., and quickly rushed to the top of the app store list with their existing domestic experience and high-intensity marketing.
(Kitty Live claims to have become the highest-grossing mobile live streaming platform in Thailand)
It is worth noting that Kitty Live chose to join hands with Mico to fight against the enemy, which indirectly shows the degree of competition in the market and that players need stronger strength to meet the challenge. After bidding farewell to the fierce competition in China, there are still problems ahead.
First of all, can the effect of a quick and fierce assault last? Is this a real first-mover advantage? When communicating with Yibang Power Network, GFC investment manager Leon reminded live broadcast entrepreneurs not to be obsessed with early achievements. "The life cycle of live broadcast is very interesting. Generally, the early growth curve is very steep, which means that many people notice and use this app, but then the decline curve is also very steep, which shows that live broadcast is a product form that is easy to scale globally. However, it also needs in-depth local operations, ensuring that core content providers continue to be active, reviewing UGC, and continuously thinking about how to improve user retention."
Although there have been some small achievements, the revolution of Kitty Live is far from successful.
Secondly, overseas markets are not without bloodshed and casualties. With Chinese giants BAT waiting for opportunities overseas, traditional European and American players such as Alibaba and Alibaba, as well as increasingly awakened local entrepreneurs and consortiums, how can "grassroots" entrepreneurs like Kitty Live and Mico persist?
The "death list" is hanging over the heads of entrepreneurs like the sword of Damocles. Last October, Zoomi, an Indonesian live video app founded in 2014, was listed. Its founder, Damek, the former CEO of the largest e-commerce company in Southeast Asia, explained: "(The business model) requires a larger fan base than we have now (to continue to operate)." Two months later, 17, a Taiwanese live streaming app that Wang Sicong and LeTV had invested in, was acquired by a Southeast Asian social platform. The latter has acquired many startups with the financial advantages of family businesses and well-known venture capital firms such as Xiangfeng and YC under Yahoo Japan.
Finally, we invest real money, but when can we reap the rewards? APUS, a service provider of tools for going global and now also setting up a fund to support newcomers, emphasizes that the commercialization of content products will not explode until the next few years. If we cannot realize it in the short term and need to continue to "burn money", how can we survive until dawn?
To survive, you need to have better products and teams, refined operations, outstanding technology, and reasonable market investment. Kitty Live and Mico's choice to join forces also sends a reminder to other players on the track and those who are still preparing at the starting line.
Will the massive overseas expansion be in vain? This is something that entrepreneurs need to answer with their own actions.
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