Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Kuaishou Technology first quarter 2022 financial results conference call. Please note that English simultaneous interpretation will be provided for management's prepared remarks. This English line will be in listen only mode. I will now turn the call over to Miss Heather Diwu, Director of Investor Relations at Kuaishou Technology.
All right. Thank you, Operator. Good evening and good morning to everyone. Welcome to our first quarter 2022 financial results conference call. Joining us today are Mr. Su Hua, Co-founder, Chairman, and Executive Director of the Board of Kuaishou Technology. Mr. Cheng Yixiao, Co-founder, Executive Director, and CEO. And Mr. Jin Bing, Chief Financial Officer. Before we start, we would like to remind you that today's discussion may contain forward-looking statements which involve a number of risks and uncertainties. Actual results and outcomes may differ materially from those mentioned in today's announcement and this discussion. The company does not undertake any obligation to update any forward-looking information except as required by law. During today's call, management will discuss certain non-IFRS financial measures for comparison purposes only.
For a definition of non-IFRS financial measures and reconciliation of IFRS to non-IFRS financial results, please refer to the results announcement for the first quarter ended March 31, 2022, issued earlier today. For today's call, management will use Chinese as the main language. A third party interpreter will provide simultaneous English interpretation in the prepared remarks session and consecutive interpretation during the Q&A session. Please note that English interpretation is for convenience purposes only. In the case of any discrepancy, management statements in the original language will prevail. I will now hand the call over to Su Hua.
Hello, everyone. Welcome to Kuaishou's first quarter 2022 earnings conference call. In the first quarter of 2022, we continued to use short videos and live streaming as vehicles and meet the online needs of more users through content technology and other efforts.
We help the users to discover more interesting and resonating content and content creators to improve their unique brand happiness. The trust and connection have become stronger and further boosted user stickiness and engagement as we made available more touch points, more interesting, useful, and beneficial content. In the first quarter of 2022, the number of our DAUs and MAUs in China continued to set new record highs, and in total traffic, they also maintained the momentum of rapid growth. On the other hand, through videoized the medium and technology services capabilities, we have kept empowering more industries, advertisers and merchants, helping them connect with more users, optimize transaction experience, and empower the digital economy. In doing so, we created value for social and economic development. Recently, a new round of pandemic broke out in China, affecting the life of certain citizens and development of enterprises.
We immediately opened up the Pandemic Assistance Portal, aiming to help users solve their livelihood issues in critical times and help more enterprises carry out production operations steady and orderly. We launched an e-commerce Warm Spring Program 2022, an online marketing pandemic refund compensation policy. We have also supported farmers by organizing activity themed fighting the pandemic and protecting spring harvest with the help of technology. We have used other strengths to contribute anti-pandemic efforts to our country and overcome difficulties together. Next, Yixiao will share with you the business development in detail.
Thank you, Su Hua. I would like to talk about the main progress and results in first quarter. Let's start with the user growth and ecosystem cultivation. In the first quarter of 2022, our DAUs and MAUs hit historical highs. DAUs reached 346 million, increasing by 17% year-over-year.
MAUs was 598 million, up by 15% year-over-year. On top of growth in user base, user stickiness also kept increasing. DAUs-over-MAUs ratio reached 57.8%. Every daily time spent per DAU was 128 minutes, increasing by 29% year-over-year. As for total traffic, it grew rapidly by over 50% year-over-year. While the first quarter is typically the peak season for user and traffic growth, these achievements were also resulted from our improved efficiency in user growth and user retention, persistent implementation of our differentiated growth approach, and our enhanced distinctive features such as social attributes, content operation, technology operation to offer unique and premium user experiences.
With the Chinese New Year coincides with the Beijing Winter Olympics in the first quarter, we successfully held joint operation event of Spring Festival and Winter Olympics, leveraging our featured user campaigns, quality content reserves, and extensive operational experiences. The event attracted millions of new users and broad interactive users back to Kuaishou. In addition to procuring rights for quality content, we'd also built a comprehensive content matrix, including secondary creations and UGCs, driving active content creation in the community. We also did well in the generate content operations and content supply as the main continuous user consumption. Despite the sharp cut in our event budget, we gained greater economies of scale and better user retention and significantly improved efficiency, which was different from last year.
After Chinese New Year holiday, the strong performance lasted, and the DAUs trend afterwards was also stronger than in previous years. That benefited from our adjustments in organizational structures since mid-2021, our cost structure optimization efficiency improvement. The enhancements in Kuaishou distinctive social attributes was also an important factor to continue to drive our user rapid growth. By the end of first quarter of 2022, the number of our pairs of mutual followers increased by 68.9% year-over-year to 18.8 billion pairs. The average number of follow per MAU also rose to nearly 300 million. At the same time, the time spent on Kuaishou app private domain also increased year-over-year as the user base grows. We maintain unique social attributes through our unique content discovery mechanism, traffic distribution mechanism, and product.
Social mindset is also influenced in connecting more Kuaishou users. From user behaviors, we found a clear positive correlation between social-based mutual follow relationships and long-term user retention rates. The formation of multilateral user network further enhanced our user stickiness and improved our user retention rates. Apart from social attributes, the creation operations of featured content verticals have also enabled us to keep attracting attention of more new and existing users. In the first quarter of 2022, we continue to make breakthroughs in featured content verticals such as short plays, sports, and pan knowledge. For short plays, we innovate the themes and upgrade quality and continue to expand influence of a larger group of users, attracting more female users to the high-tier cities.
In the first quarter of 2022, our flagship project, Astro, which focuses on creating high quality leading short plays, launched 18 blockbusters with a cumulative view of over 100 million, including the phenomenon Her Highness, Princess Royal, and also Revenge from Phoenix, which became international sensations. To date, we have released close to 12,000 short plays, of which 350 are top quality and industrial leading, putting us on the top of producer list for blockbuster short plays. Taking advantage of Spring Festival traffic, Kuaishou pioneered and launched 56 scheduled short play series under Project Astro with more than 15 billion exposures on the internet, building user mindset of consumptions. We invested in sport content, and the results we achieved have been well noted.
As of March 2022, Kuaishou covered more than 40 sport categories, home to close to 100,000 content creators. In addition to copyright cooperation of the Summer and Winter Olympics, we have also reached copyright and content cooperation agreements with NBA, UEFA Champions League, National Football League, NFL, Super Bowl, Major League Baseball, MLB, and Ultimate Fighting Championship, UFC, and other mega sports events. We have gradually built a diversified sports content covering fields as football, basketball, boxing, billiards, car race, and extreme outdoor sports, and continue to attract hundreds of domestic and overseas sports stars and international celebrities to our platform, forming a global sports content ecosystem. Technology capabilities are also one of the main growth drivers.
We kept iterating our deep learning model, optimization recommendation strategies, and adopting AI technology to provide user with a better experience, and that has also helped to boost the user growth and improve long-term user retention rates. At the same time, AI technology also helps us to further improve the efficiency of traffic utilization, achieve simultaneous optimization of user growth and monetization efficiency. In the first quarter of 2022, our total revenue increased by 23.8% year-over-year to CNY 21.1 billion. We delivered better growth results across the board in our business than the industry and continued to gain market share. Among them, revenue from online marketing services was CNY 11.4 billion, increased by 32.6% year-over-year. Affected by the resurgent pandemic, the macroeconomy is under pressure this year.
The whole advertising industry was affected severely. Kuaishou's performance correlates closely with the macroeconomy, hence is also under pressure. Relatively speaking, with our advantage in traffic, ecosystem, products, technology and services, we're still able to maintain the pace in growing our market share. In the first quarter of 2022, our total traffic increased more than 50% year-over-year, which laid a solid foundation for a rapid growth in online marketing services. In the current macro environment, advertisers care more about their effort and effect of their ads and Kuaishou's video-based advertisements, which with rich content and also strong interaction experience and expressiveness, continued to gain popularity among advertisers. At the same time, our comprehensive ads product matrix and closed loop business ecosystem have also enhanced each other integration between brand advertising and performance ads, and also they strengthen the conversion from recommendation to transaction.
Therefore, demand from advertisers has shown relatively strong resilience. Moreover, we are able to apply our powerful AI technology more precisely and with greater depth in online marketing services as our business grows. We extracted and refined more valuable labels and indicators which are directly related to ad performance and serve as key reference to our recommendation model, so that we are able to improve business efficiency and effectiveness. Affected by macroeconomy and pandemic, our monthly advertisers decreased year-over-year in the first quarter. By continuously optimizing our ad system and advertiser experience, we gained popularity and recognition from the increasing number of advertisers. In the first quarter of 2022, the number of our advertisers increased by more than 60% year-over-year.
At the same time, our advertiser retention rate was also optimized, which demonstrated our ability to provide advertisers with satisfactory rates of return. Our closed loop advertisement maintained healthy growth in the first quarter of 2022, making it an important contributor to the growth of our revenue from online marketing services. This was mainly resulted from the rapid development of our e-commerce business by the synergy in organizational collaboration and continued iteration of closed loop advertising products. On the organizational side, our online marketing service team and e-commerce team have been cooperating more closely. This has brought about better alignment in business goals designed to provide better services and improve conversion rate for our e-commerce merchants.
In terms of products, apart from typical ads through e-commerce live streaming, we have actively exploring short video-based e-commerce ads, which provides a chain of recommendation to a transaction as we have larger inventory of short plays. We have been constantly improving our experience and product effectiveness along the transaction chain. Since mid-March, the resurgence of pandemic has dampened the activeness of merchants streaming and advertising willingness. To reduce impact from pandemic and to support the merchants, our Magnetic Taurus launched a pandemic refund policy to performance-based advertisers agreeing to refund to 20% of advertiser fee if user canceled the order due to logistic problem in impacted areas. As for brand advertisers. As for brand advertising, leveraging our successful event operations such as Winter Olympics and Spring Festival in the first quarter, we attracted dozens of world-renowned brands.
Kuaishou has gradually established a more distinctive and differentiated position in minds of the brand advertisers. Turning to e-commerce, in the first quarter of 2022, our e-commerce GMV amounted to CNY 175.1 billion, growing rapidly by 47.7% year-over-year, of which more than 99% was from our native e-commerce system. We continue to work on trust-based e-commerce, branded e-commerce, and service partner system. As we do, we are changing more users' consumption mindset by providing our unique, strong, trusted user experiences, high quality and rich products and e-commerce content, and using the leading recommendation technology. In the first quarter of 2022, our e-commerce penetration rate and sales conversion rate continued to rise year-over-year. More users became active buyers of Kuaishou e-commerce, and their willingness to spend kept rising.
As of March 2022, the number of annual active buyers of our e-commerce business exceeded 210 million. We launched Trustworthy Shopping, a comprehensive service rights and interest protection system this year. The trust index generated accordingly covers dozens of dynamic evaluation indicators such as product quality, service quality, streamers' attitude, product experience, and after-sale guarantee. Under the merchant recommendation system, a merchant with higher trust index will enjoy greater exposure and operation rights and interests. It guides the merchants to improving their operations and enhancing their service quality. Trustworthy shopping experiences continue and contribute to better user experience, stickiness, and our monthly repeat purchase rate in the first quarter further increased compared with the same period last year. Turning to the brands. Well-known brands led to the growth of brands on our platform in the first quarter.
We have also come up with a Kwai Brand strategy. Kwai Brand as emerging merchants are born and have grown in Kuaishou's e-commerce ecosystem. They have their own brand capabilities and uphold the business philosophy of honest people, quality goods, and reasonable prices in providing users with better experience for money, products, and services. These type of merchants tend to have a better understanding of content and live streaming e-commerce. In the first quarter of 2022, the average monthly GMV per Kwai Brand merchant amounted to more than CNY 25 million, and the unit price was about twice the company's average. Their users' monthly repeat purchase rate exceeded our e-commerce average, reaching more than 80%. This year, we plan to support 500 Kwai Brands. Kwai Brands have huge room to grow, and we will further help Kwai Brands to rise and develop.
Over the past year, we have built a stronger service partner system. In the first quarter this year, in addition to the increasing number of service partners, we have also paid more attention to their quality improvement. Empowered by service providers, thousands of merchants increased their sales by leaps and bounds during the first quarter. We also set up an incubation and operation center, providing precise support to mid-tier to long-tail merchants to helping them to grow quickly. In the first quarter of 2022, the number of our monthly active sellers climbed quickly year-over-year. Since mid-March, COVID-19 has spread and related control measures have been tightened, hitting the logistics, warehousing, and manufacturing operations of e-commerce industry. Thus, the user ordering and merchandise shipping in affected areas have also been hampered.
These, in return, have all directly affected merchants' delight to live stream and users' order frequency. To reduce the impact of pandemic on Kuaishou merchants, we launched Warm Spring Program 2022 to provide multiple support policies, including allocating exclusive e-commerce traffic, adding virtual goods and local services, offering incentives to pandemic-affected streamers, adjust the merchant fulfillment policies, and transforming logistic data of pandemic-affected area online, et cetera. We are standing firm with users and merchants to overcome difficulties. The live streaming business also continued to improve in the first quarter of 2022, with revenue reaching CNY 7.84 billion, an 8.2% increase year-over-year. Our live streaming model with lower entry barriers and high inclusiveness also showed a relatively strong resilience and growth momentum.
The first quarter is the peak season for users and traffic growth, laying a solid foundation for live streaming business to grow. At the same time, as a starting point of explorers, the industrialization of live streaming e-commerce and the ecosystem, live streaming scenarios and content such as Kwai Recruitment have also brought more new users and traffic to the business. In the first quarter of 2022, the MAU penetration rate of our live streaming business increased from 74% in same period last year to more than 80%. Live streaming is the main source of content supply of Kuaishou. Through intensive and interactive cooperation with professional talent agencies, we have kept optimizing the quality of content, identifying high-quality live streaming content through technologies, and matched more traffic resources with streamers to bolster streamers' live streaming willingness, thereby forming a virtuous content supply and demand cycle.
In first quarter of 2022, the average daily live streaming time of our streamers increased by double-digit percentage point year-over-year, and ecosystem of live streaming content remained active and healthy. The high-quality content supply resulted in the rebounding live streaming consumption. In the first quarter of 2022, the average monthly paying users of live streaming business was up 7.8% year-over-year. Although live streaming is a Kuaishou's long-running business, it has continued to innovate, iterate, and deliver value. The live streaming recruitment service, Kwai Recruitment, has been widely popular among users since its debut. We encourage different types of streamers to include their service in live streaming, use their influence to help match enterprises and employment in need for the users.
In the first quarter of 2022, the number of MAUs of Kwai Recruitment also exceeded 100 million, and the highest number of CVs received in a single day during Spring Festival was 150,000. Benefited by the strong trust relationship of users and high frequent real interactions, the job conversion rate and user retention rate of Kwai Recruitment lead the industry. As the graduation season comes, we recently jointly launched the 2022 college student cloud recruitment event, featuring a total of more than 38,000 jobs from the participating companies. We hope to gradually improve the video-based recruitment experience, create more and better employment opportunities and higher conversion rates for blue collar workers and college students, and in return, help the real economy to develop. Entering 2022, our overseas business has achieved effective growth on the basis of controlled cost.
Through differentiated product positioning, division of user groups, content supply, ecosystem governance, and algorithm technology, our overseas business has established a unique product positioning in the first quarter of 2022. Core indicators such as overseas DAUs, average daily time spent per DAU, and user long time and long-term retention continue to improve. In Brazil, for example, we built a high and high-sticking user group and an ecosystem featuring a positive cycle of healthy content creation and consumption, resulting in average daily time spent per DAU close to 60 minutes in the first quarter of 2022. In the future, for different overseas markets, we will continue to strengthen local operation capabilities, building commercial infrastructure, and keep exploring monetization models. That's my presentation. Next, Jin Bing will share with you the company's financials.
Thank you, Cheng Yixiao. Hello, everyone.
Now, I am going to give a close look at our financial performance for the first quarter of 2022. We began 2022 with a quarter of satisfactory financial performance, demonstrating our relative resilience against the challenging operating environment. Our initiatives in cost control and financial efficiency, and combined with a focus on both quality and quantity of growth, deliver solid revenue performance and continued narrowing of losses. Our revenues for the first quarter increased by 28.8% year-over-year to CNY 21.1 billion . The increase was primarily driven by our growth in online marketing services and other services. Within other services, growth was driven by our e-commerce business in particular. Online marketing services gained further market share as our differentiated value positioning attracted more advertisers to our platform.
This allows to further monetize our continued user traffic growth, driving our online marketing service revenue to CNY 11.4 billion, an increase of 32.6% year-over-year, taking revenue to 53.9% in the quarter. The more modest year-over-year growth in online marketing services compared with the previous quarters was due to the impact of both the new wave of COVID-19 and macroeconomic factors. Other services revenue increased by 54.6% year-over-year to CNY 1.9 billion, mainly due to the strong growth in e-commerce revenues in the quarter. Our unique trust-based e-commerce ecosystem, combined with improving brand e-commerce and growing service partners system, resulted in e-commerce business GMV increasing by 47.7% year-over-year to CNY 175.1 billion.
Revenue from live streaming increased by 82% year-over-year to CNY 7.8 billion in the quarter. This was mainly the result of average MPUs per live streaming growth, 7.8% year-over-year, supported by ongoing improvements in content quality and operating efficiency. Our cost of revenues for the first quarter of 2022 increased by 22.5% year-over-year to CNY 12.3 billion, representing 58.3% of total revenues. The year-over-year increase was mainly due to two factors. First, an increase in revenue sharing costs and related taxes, which were in line with our revenue growth. Second of all, an increase in content costs as part of the other cost of revenues resulting from our continued efforts to diversify content verticals and enrich our content ecosystem.
We were able to partially offset the impact of these factors in the quarter through optimization efficiency of our bandwidth usage, reducing our bandwidth expenses and server custody costs. Gross profit for the first quarter of 2022 reached CNY 8.8 billion, growing 25.7% year-over-year. Gross profit margin in the first quarter of 2022 was 41.7%, improving from 41.5% and 41.1% in the fourth quarter and first quarter of 2021 respectively. Our year-over-year increase were the result of, first, further optimization of bandwidth and server efficiency, which drove a decrease in the ratio of bandwidth to revenue. Second, our optimization of personnel related costs. Third, improvements in our revenue structure.
Selling and marketing expenses were CNY 9.5 billion for the first quarter of 2022, decreasing by 18.6% year-over-year and 7.2% quarter-over-quarter, representing 45% of revenues, down 23.5 percentage points from 68.5% in the first quarter of 2021. The decrease was the result of discipline and more efficient spending on user acquisition and maintenance, highlighting our commitment to efficient, high-quality growth. Administrative expenses and research and development expenses for the first quarter of 2022 were CNY 871.4 million and CNY 3.5 billion respectively, decreasing by 5.3% and 12.3% quarter-over-quarter due to a decrease in employee benefit expenses as we streamline our business operation.
Our operating loss for the first quarter of 2022 decreased to CNY 5.6 billion, improving significantly from CNY 7.3 billion in the first quarter of 2021 and CNY 5.8 billion在第四季度2021。这导致比上一季度提高了16个百分点，从第一季度2021年的负42.8%上升到当前季度的负26.8%。我们为期六个月的损失是CNY 60.3亿，2022年第一季度调整后净损失为CNY 3.7亿，低于2021年第一季度的CNY 5.7亿，调整后净利润margin改善了15.5%。我们继续保持强劲的资产负债表，现金、现金等价物、存款、限制现金和财富管理产品截至2022年3月31日为CNY 44.5亿。我们庞大且不断增长的流量和每个业务领域多个增长引擎为业务增长奠定了坚实的基础，帮助我们进一步获得在线市场份额，同时我们在导航充满挑战和不确定的宏观环境下。加上管理团队在以前的季度做出的决定，专注于成本控制和运营效率，为我们的业务注入了大量韧性。展望未来，这种韧性将在我们核心业务的持续、可持续和健康发展中发挥关键作用。这结论我们的准备remarks。我们现在打开问题，operator，请go ahead。[Foreign language]
好的，提醒一下，如果您需要提问，请按星字键，再按一字键。如果您需要撤回您的问题，请按井字键。请先用中文提出您的问题，再将您的问题翻译成英文。我们现在进入问答环节。第一道问题来自Credit Suisse的Kenneth Fong，请发问。[Foreign language]
嘿，谢谢管理层接受我的提问，也恭喜又一次非常抢眼的业绩。我想请教一下，就是第一季度我看到这个用户跟时长也创了新高，但是销售费用也控制得非常之好。请问管理层这个超预期的增长主要的驱动是什么原因？我们应该怎么想这个可持续性呢？我翻译一下。[Foreign language]. Congrats on another strong quarter results. Thanks management for taking my question. I saw both user growth and time spent hit a new record in first quarter and at the same time sales and marketing expense are also well under control. May I ask about the growth driver behind and their sustainability? Thank you.
Thank you for this question. Indeed, we continue to deliver satisfactory results in users and traffic hitting new record high in Q1. DAU reached 346 million and MAU reached 598 million. Several reasons behind it. First, our differentiated business path and strategic adjustments to user growth and retention. Second, the strong carrying capacity of short video as a high dimensional media. Third of all, our remarkable improvement to our organizational efficiency.
首先，我们聚焦了自身的优势，选择了更多差异化的增长路径。比如，社交属性就是快手非常鲜明的特色和优势。这是因为我们长期坚持内容发现机制的平衡以及社区健康运营管理。我们从用户的行为中发现，社交关注关系和用户的长期留存率之间有明显的正相关关系。用户通过社交满足了自我展示和获得其归属感的需求。那快手在这为用户提供了差异化的价值。我们针对性地探索了社交拉新的增长路径，通过社交拉新引入的新用户，无论是短期还是长期的留存率都有更好的表现。通过社交拉新的机制，新用户进入到快手的时候，第一时间就能已经与自己已经熟悉的人建立了链接的关系。同时基于关系网络，我们也可以更快更好地将周边好友喜欢的内容推荐给新用户。那这个过程，不仅加强了社交的粘性，也带来了更高的留存率和消费的深度。这种社交机制通过我们的社区氛围、流量分发、内容推荐等机制，以及产品设置的引导，进一步形成了更强的社交粘性和差异化的产品性质。[Foreign language]
First we concentrated on our growth strength and pursue a more differentiated growth path. Our social attributes, for example, are one of our most distinct features and advantages, and thanks to our continued focus on balanced content discovery mechanism and healthy community operation and management. User behavior suggested a clear positive correlation between social-based mutual follow relationships and long-term user retention rates. People fulfill the need for self-presentation and sense of belonging through online social interactions.
Kuaishou provides its users with differentiated value. When we looked into the new growth patterns of users acquired through social interactions and found that these users have a higher retention rate both in short and long term. Through the social based user acquisition mechanism, new users will already have established connections with acquaintances when they log into Kuaishou for the first time. In addition, based on relationship network, we can quickly and accurately recommend quality content that is popular among friends to new users. This process not only increases social stickiness, but also leads to a higher retention and deeper consumption levels. This type of social mindset, guided by our community environment, traffic distribution, and content recommendation mechanisms, and also product settings, further generates a higher social stickiness and differentiated product mindset.
那差异化还体现在内容还有内容的运营上。无论是我们的短视频还是娱乐直播或者电商直播业务，总时长绝对值都在持续地增长，这说明我们持续提供了符合用户需求丰富的新内容，吸引他们持续地消费。我们更为体系化地去运营更适配快手调性的内容垂类，比如说我刚才讲的短剧、体育和泛知识。用户在内容消费之余，在社交氛围下基于内容的消费而也产生了更多的共鸣以及互动。那更为重要的是我们去中心化的流量分发机制，让更多好的内容可以被发现，提升创作活跃度，吸引更多的创作者加入快手。那一季度我们的MAU中有25%的用户创作了内容，其中中长尾创作者内容贡献了80%以上的VV。Our differentiation also can be seen through our content and content operation. [Foreign language]
Total time spent on short videos, entertainment and e-commerce live streaming are all consistently increasing, a reflection of the rich new content that we continue to provide to meet users' needs and drive continuous consumption. We also systematically operate the content verticals that better fit Kuaishou's characteristics such as role plays, sports, and pan-knowledge. In addition to content consumption, our content within this social environment resonated more deeply with users and inspired more interactions. More importantly, our decentralized traffic distribution mechanisms allow a more quality content to be discovered and promotes content creation, attracting more creators joining Kuaishou. In the first quarter, 25% of our MAUs had created content, and content from mid to long tail creators accounted for over 80% of the total video views.
其次，我们所处的短视频还有直播的行业，在互联网行业中处于高位的位置，有着非常强的渗透率，那在展现效率和商业效率方面呢，有个绝对的优势，像招聘、本地生活、房产等等业务也在持续地为快手带来更多的用户和时长的增长。更多的社交关系和更多的使用场景，那都在增加快手以及用户之间的触点，那也能提升用户的粘性，那用户呢，也就自然而然地会选择更能解决自身需求、用着方便、体验好的产品了。Secondly, the short videos and live streaming industry we are in are at a higher dimensional position in the Internet industry with strong penetration capabilities and have an unrivaled advantage in display and business efficiency.
Businesses such as recruitment, local services, real estate, etc., are all continuing to bring more users and increase user time spent on Kuaishou. Increased social connections and use case scenarios also resulted in more touch points between users and Kuaishou, leading to a higher user stickiness. Naturally, users are drawn to products that solve their problems, are easy to use, and provide premium experiences.
那最后呢，我们持续推进的组织提效工作，也确实不断地在交付着成果。那第一，我们持续探索和投入新的增长模式和渠道，不断地突破行业模式的限制和渠道效率的制约，我们不停在寻找更高效和适配的路径。那第二呢，我们对于用户体系做了精细化的管理升级，更高频和动态地去做单个用户的标签和分类的管理，以匹配差异化的需求，高效节约了更多不必要的支出。用户留存效率有了更好的表现，那DAU的不同周期的留存率呢，都有了进一步的提升，处于行业比较领先的水平。那第三呢，组织架构调整后，部门之间的数据隔墙都打通了，那技术能力和推荐策略就能得到优化。在渠道智能推价、智能出价、投放、素材创作、用户精细化补贴等方面都取得了巨大的进步，具备行业领先的能力。那提升也为增长和维系的花做了额外的贡献。比如，我们在春节多投入了产出比。一季度我们的用户规模保持优异的增长，用户获客和维系成本的优化。那第五呢，我们也在积极提升单用户的变现的效率。一季度新用户ROI保持优化的趋势，振奋人心。我们非常有信心在逐步控费用率的基础上实现中长期四亿DAU的目标。[Foreign language]
Finally, our continuous efforts to improve organizational efficiency are yielding ongoing results. First, we continue to explore and invest in new growth models and channels, breaking through the limits of traditional business models and channel efficiency to find more efficient and adaptable paths. Second of all, we refined and upgraded our management of user system through more frequent and dynamic management of user tags and classifications; we can easily match the diverse needs, cutting unnecessary expenses efficiently. As a result, our user acquisition and retention efficiency has better performance, and our DAU retention rates of users at different stages kept increasing and among the highest in the industry. Third, our organization restructuring has removed data barriers. We further optimized our technical capabilities and recommendation strategies, and have made great progress in advanced intelligent channel bidding, promotional content production, refined user subsidies, etc. Achieving the industry-leading capability.
In addition, we increase our operating efficiency to drive user growth and retention for big events like the Spring Festival and Winter Olympics. We maximize our investment returns and our user base continued to expand in the first quarter, while acquisition and retention cost per DAU have both been optimized. Lastly, we are actively improving our monetization efficiency per user. In the first quarter, our new user ROI continued to improve, which is very inspiring. We are confident to continue to achieve 400 million DAUs in the mid to long term on the basis of gradually controlling the expense ratio.
好的，下一个问题。
谢谢。下一道问题来自Morgan Stanley的Alex Poon，请发问。[Foreign language]
晚上好，管理层，恭喜你非常好的业绩。我的问题是关于电商的。一季度虽然不是电商的旺季，和三月有疫情的爆发，但是我们在一季度GMV的表现还是增速还是非常强劲的。能否请管理层分享一下我们最近电商的一些情况？另外也是关于电商的，是关于我们品牌的策略，特别是刚才你提到的快品牌，能否再详细讲讲这个空间，这个有多大这个市场？谢谢。My question is related to our e-commerce business. [Foreign language]
Despite first quarter not being a high season and the spread of Omicron in March, our GMV growth still grew very strongly by 48% in Q1. Could management explain the recent trends of e-commerce in second quarter? My second question, also related to e-commerce, is regarding our brand strategy, especially our Kwai Brands. Can management explain how big the TAM could be in future? Thank you very much.
谢谢你的问题。首先，从三月中旬开始，疫情在国内多地快速蔓延。据估算，这轮疫情大概波及了全国八成以上的省份、自治区和直辖市。我们的电商业务也受到了疫情的直接影响，同比增速出现了一定程度的放缓，但相对于行业平均，韧性更强一些。一季度GMV同比仍有接近50%的增速。电商业务现阶段的瓶颈主要在物流和仓储端，快手用户的购买意愿还是相对比较稳健的。在受疫情影响比较严重的区域，也是电商行业和快手的重镇地。比如，江浙沪地区是很多服饰箱包厂商和产业带聚集的地方。而华北、东北等地区也是快手核心用户的阵地。经过我们初步的统计，快手有超过一半的商家处于疫情管控地区，受管控的影响，用户没有办法按需下单收货，用户下单频次相比去年同期有所下降，相关地区的商家开播的活跃度也受到了影响。电商的履约环节受阻影响了消费者的购物体验，导致了商家这边退款率的上升。这些因素都使得快手电商业务的增速有所放缓。我们也为受疫情影响的商家和主播用户提供了多重的帮助和激励政策，尽量降低疫情带来的影响，大家一起共度时艰。随着部分地区疫情的有效管控，复工复产也开始推进。我们看到电商业务的表现从四月下旬开始正在逐步好转，我们也在积极筹备快手616直播购物节活动，我们会密切观察后续疫情的走向、形势管控以及物流体系的恢复。[Foreign language]
Thank you for the questions. Since mid- March, COVID-19 resurged in various parts in China. It is estimated that the pandemic affected more than 80% of the provinces, autonomous regions and also municipalities. Our e-commerce business has been adversely impacted and year-on-year growth rate has slowed. However, our business shows more resilience comparing with industry average, and our GMV still increased by nearly 50% year-over-year in the first quarter.
The current bottlenecks of e-commerce are mainly on logistics and warehousing, whereas the purchasing intention of Kuaishou users remains relatively stable. The area most affected by pandemic are also the main footholds of e-commerce industry and also Kuaishou. For example, Jiangsu, Zhejiang and Shanghai are places gathering many apparel, footwear and accessory manufacturers and production zones. Northeast and North China are also key bases of Kuaishou users. It is estimated that more than half of Kuaishou's merchants are in pandemic control areas. Affected by the control measures, users can not order on demand and receive delivery on time. Purchase frequency decreased year-over-year. Merchants live streaming activity was also impacted in these areas. Difficulty in logistics fulfillment affected consumers shopping experiences, resulting in higher refund rate. All of these factors slowed our economy and e-commerce growth.
We provided a variety of assistance and intense incentive plans for merchant, streamers and users affected by the pandemic to mitigate the impact and work together to overcome the challenges. As the pandemic control in some areas began to take effect, operations and production have steadily resumed. We noted that our e-commerce business has gradually recovered since second half of April. We are also actively preparing Kuaishou 616 Shopping Festival. We will keep monitoring the pandemic trend, related policies as well as the recovery of logistics and systems.
那在这儿呢，我想强调的是，尽管短期存在着不确定性的因素，但我们仍然有信心中长期持续地还可以获取市场份额。首先呢，直播电商高效生动的商品展示的功能，以及高效实时的互动，对于产品的表达，然后以及销售呢，销售效果都有显著的效率上的优化。那在提升用户购物的体验价值比的同时，那也能为商家，特别是非标品的商家提供了更友好的回报率，那伴随着我们高速增长的流量，展现出了天然的爆发力。那其次呢，我们独特的强私域、强复购的新零售模式，将信任购的体验不断地推向极致。那所以我们有保持行业领先的月复购水平，为商家提供了赖以长期经营的用户的阵地。那第三呢，是我们高价值大体量的用户的群体。截至2022年3月，那我们的电商年度活跃买家数已经超过了2.1亿。那最后呢，是我们领先的内容运营和技术匹配上的能力。[Foreign language]
I would like to emphasize that despite the short-term uncertainties, we remain confident to acquire market share in mid- to long-term. First of all, the effective and the vivid product display, as well as the efficient and real-time interactions significantly improve efficiency of product and presentation and sales. E-commerce live streaming delivers high returns for merchants, especially those with non-standard products, while boosting consumers experience-value ratio. Combined with our unique and robust private domain and strong trust-based e-commerce model, consistently push the Trustworthy Shopping experience to a new limit. Our industry-leading monthly repeat purchase rate provides merchants with user base for long-term operation. Thirdly, we boast a high-value large-scale user base. As of March 2022, the number of annual active buyers of our e-commerce business exceeded 210 billion. Finally, we have strong content operations and technology-based matching capabilities.
关于第二个问题，品牌的策略，我先说一下快品牌。快品牌是快手电商生态中成长起来的、生根于快手的新兴自主品牌。快品牌有三个核心的特征和优势。第一，是直播间和货的并重，都是品牌。除了自有货的品牌，直播间本身也成了一个品牌，吸引着用户。第二，是通过直播间和货并重的环境，能够把服务做到最好，提供给用户更好的体验性价比。快品牌有能力产出高质量的电商内容，拥有优质的供应链资源，能充分利用快手信任电商的土壤，更好地满足快手用户的需求。第三方数据显示，快手全网关注品质和价格的用户，也就是我们说的体验价值比的消费者数量，在今年一月达到近70%的水平。从消费趋势上来看，消费升级也意味着更加追求个性化体验感和品质化的特点。这些消费新势力的崛起也将持续助力我们快品牌的发展。第三，是商家提供了好的性价比的时候，用户也会给予更强的信任反馈，这就会形成强私域强复购，商家能从中受益。快品牌用户的月复购率超过快手平均电商月复购率，达到了80%以上的月复购率。我们今年也争取扶持超过500个快品牌。长期来看，快品牌商家将成为我们快手上主要的GMV贡献群体。[Foreign language]
As to your second question on brand strategy, let me first of all discuss Kwai Brand. They are emerging independent brands grown from Kuaishou e-commerce ecosystem and are deeply rooted in Kuaishou. Kwai Brand have three core characteristics and advantages. First of all, live streaming room and the merchandise are both carrying a brand. That is to say, not only the goods are branded, but the live streaming room itself has also become a brand attracting users. Second of all, through the environment that places same importance on live streaming rooms and goods, we maximize service quality, providing users with better experience value ratio. Kwai Brand have the ability to produce high quality e-commerce content, have premium supply chain resources, and can make full use of our trust-based e-commerce soil to better meet users needs. Third-party data shows the percentage of consumers who pay attention to quality and price.
That is what we call high experience value ratio reached nearly 70% in January 2022. In terms of consumption trend, consumption upgrades also means pursuit of personality, or personalization, experience and quality. The rise of new consumer forces will continue to help the development of Kwai Brand. Third of all, when a merchant provides higher experience value ratio, they gain stronger trust from Kuaishou users in return, which forms a strong private domain and results in a high pre-purchase. A merchant also benefits from it. The monthly repeat purchase rate of Kwai Brand users exceeded the average, reaching more than 80%. This year, we will support over 500 Kwai Brands. In the longer run, we expect Kwai Brand merchants will become the main GMV contributors.
当然了，成熟和知名的品牌在快手的话也有了很快的增长。今年一季度，知名品牌直播的GMV增速远超过大盘，知名品牌买家的整体规模同比增长高达150%。我们希望帮助这些传统品牌开拓新的消费人群，同时帮助他们沉淀私域流量，提供更好的营商环境，让这些品牌能够实现进一步的增长，做到真正的长效经营。[Foreign language]
Of course, established and well-known brands have also grown rapidly in Kuaishou. In the first quarter, the growth rate of well-known brands self-operated live streaming GMV far exceeded that of total GMV. Well-known brand buyers increased by 150% year-over-year, and we hope to help these traditional brands developing new customer and also consumer groups and at the same time helping them accumulate private domain traffic and provide a better business environment so that these brands can achieve further growth through long term and efficient operations.
下一个问题。好的，感谢。下一道问题来自Jefferies的Thomas Chong。请发问。[Foreign language]
晚上好，谢谢管理层接受我的提问。我的问题是关于我们的广告业务，看到在一季度的话，保持一个非常强劲的增长趋势，持续获取市场份额。想请问一下，在这个当前的疫情还有宏观等不确定的因素对我们广告的影响会如何？然后我们怎么看近一年广告业务的增长。谢谢。[Foreign language]. Thanks management for taking my questions.
My question is about the advertising outlook. Given our strong momentum in Q1 and continue to gain market share, how should we think about the impact of COVID and macro to affect our advertising momentum? How should we think about 2022 full year advertising growth? Thank you.
谢谢你的问题。确实，当前的宏观经济和疫情给整个广告行业都带来了很多的挑战。那咱们的广告业务呢，也确实面临着同样的问题。从去年下半年开始，受宏观和部分行业政策的影响，广告行业的增速呢就开始了放缓，我们相对还是取得了更高的收入增速，持续获取了市场份额。那情况在三月中旬又有了新的变化，疫情和管控的措施再次的加剧，对很多行业造成了打击，给宏观经济的恢复也确实带来了更多的不确定性。基本呢，各行各业的广告主预算都做了更加保守的调整，广告收入同比增速从三月中开始放缓，目前没有非常明显的恢复势头。但我们快手呢，跟用户和消费都很近，一旦宏观环境形势好转，我们的广告业务也会有及时的反应。[Foreign language]
Thank you for this question. The current macro economy and pandemic have brought many challenges to the entire industry, especially the ad industry. Our ad business is also facing the same obstacles. Since the second half of last year, the growth of the ad industry started to slow down due to the macroeconomic factors and some industrial policies. We achieved a relatively high growth rate and continued to gain market share though. In mid-March, there was a new twist that the pandemic and control measures has resurged, hitting many industries and bringing more uncertainties to the recovery of macro economy. Advertisers across sectors have adjusted their budgets to be more conservative, and the year-over-year growth rate of our ad revenue has moderated since mid-March without a notable recovery till now.
However, Kuaishou is very close to users and consumption. Once the macro situation improves, our advertising business will also respond in a timely fashion.
关于影响，我也具体展开讲一讲。首先，是内循环电商广告，这个比较好评价，因为在物流、仓储和生产等疫情的管控的限制下，电商商家的开播、销售和履约环节都受到了影响。内循环电商广告与销售还是高度关联的。绝大多数商家面临这样的情况会暂缓划广告的投放，内循环广告面临和电商GMV类似程度的增长放缓，但近期也展现出一些恢复的信号，我们仍然对疫情的走势保持着观察。[Foreign language]
As to the impact, let me provide more details. The first is the closed-loop e-commerce ad, which is easy to understand, because logistics, warehousing and production were affected by the pandemic restrictions, and merchants' live streaming, sales, and product delivery were also impacted. Our closed-loop e-commerce ad is highly correlated with e-commerce sales. Facing a situation like this, most merchants will choose to suspend advertising. As such, closed-loop ad is facing a growth slowdown similar to that of GMV, and has shown some signs of recovery recently, but we still keep monitoring the trend of COVID.
相比之下，外循环广告压力会更大，因为外循环广告受宏观外部环境的影响更加直接，所涉及的广告的行业也更加广。包括很多业务，在线下的广告主，外循环价格端进一步出现下行的趋势。在这个环境下，广告主对转化的效率要求会更高。相对于其他的公司，我们的流量还在稳步增长，视频化广告也有天然的优势，仍在继续地获取广告主的预算的倾斜。同时我们的广告加载率同比保持提升，商业化程度有进一步的提升空间。通过直销和代理团队，我们也在继续拓展广告主的覆盖。一季度的广告主数量同比增长超过了60%，广告主的流失率也在进一步优化。我们会继续通过组织绩效、广告系统、产品和技术迭代，服务能力的提升以及素材质量的优化，去提升广告主的ROI表现，赢得更多广告主的信赖。[Foreign language]
In comparison, the pressure on external performance ads has been greater, because the external advertisers have been more directly affected by the macro environment relating to a wider range of industries, including those with offline operations. The pricing of external ad has been in a downward trend. In this environment, advertisers have higher requirements for sales conversions. Compare it, with other companies, our traffic is still growing steadily, and video advertising has a natural advantage of continuing to enjoy a budget bias from more advertisers. At the same time, our ad load continued to increase year-over-year, and there is further room for commercialization.
Through direct sales and agencies, we are also continuing to expand our coverage of advertisers. In the first quarter, the number of advertisers increased by more than 60% year-over-year, and advertiser retention rate was further optimized. We will continue to help advertisers improve their ROI and win their trust through organizational efficiency improvement, ad system, product and technology iterations, service capability improvement, and also quality enhancement of ad materials.
那品牌广告呢，对于宏观经济的话也十分的敏感。因为现阶段的广告主会更加地关心效果的表现，我们现在需要做的就是放大我们快手品效结合的优势，同时通过类似冬奥这种确定性更强的活动大场，吸引更多品牌广告主的关注。短期业务的表现肯定也会受到一些影响，但我们的品牌业务呢，仍然处于早期的增长阶段，相对于成熟企业受疫情宏观影响的冲击呢会小一些。[Foreign language]
Brand ads is also sensitive to the macro environment and economy, since advertisers are more concerned about performance at this period. What we need to do now is to highlight the advantages of Kuaishou that combines brand and performance ads, and attract more brand advertisers through events that deliver more certain results like the Winter Olympics. While our brand ads has been affected in short term, it is still in the early growth stage and will be less impacted by the pandemic and the macro environment related to or relative to the mature companies.
我们对于大环境的恢复节奏呢，保持观望，也保持着耐心和长期的信心。无论市场的话如何波动，我们坚定地相信长期来看，快手的线上广告市场份额能进一步的提升。[Foreign language]
We continue to monitor the pace of macro environment recovery with patience and long term confidence. No matter how the market fluctuates, we firmly believe that we can increase Kuaishou online advertising market share in the long run.
最后一个问题。[Foreign language]
谢谢。下个问题来自CICC的张雪琴，请发问。[Foreign language]
感谢管理层接受我的提问，很荣幸问最后一个问题，我的问题是关于直播业务的。那一季度我们的直播业务逆势取得了出色的表现，保持良好的增长，但我们也看到近期行业持续整治，也有一些新规出台，能不能请管理层分享一下监管对于快手直播业务的潜在影响，然后公司今年的直播业务增长目标会有什么变化？[Foreign language] And I will translate myself.
My question regarding to live streaming business, we have achieved stable growth against headwinds this quarter. However, we saw updated regulations and live streaming industry. Could management share the potential impact on Kuaishou live streaming business, and how do we think about the growth target in 2022 under the new rules? Thank you.
好，谢谢你的问题，那这个问题我来回答一下。那么不同的业务对于我们生态的价值也是各有不同的。直播对于快手来说呢，具有很强的内容属性，也是用户之间交互建立信任的重要场景，其中延伸出各种需求和交易，也增加了用户的活跃度和时长，也扩充了我们的变现形式和模式。不同于其他直播业务公司，我们更关注如何打造普惠的、低门槛的、参与度更高的直播业态，并不过度追求高打赏、刺激性的消费。同时，作为对于以直播作为载体的不同业务，其变现方式也是非常丰富且不断演化的。除了传统的虚拟礼物打赏，像直播电商、招聘都是嫁接在直播上的商业模式。我们也更加重视对于更多直播生态产业化机会的探索。[Foreign language]
Thank you for this question, and please allow me to share some color on this one. The value of different businesses to our ecosystem is also different. For Kuaishou, live streaming has strong content attributes, and it is also a vital setting for users to communicate and establish trust. Various demands and transactions are generated from it, increasing user engagement and user time spent while also expanding our monetization avenue. Unlike the other live streaming companies, we are more focused on establishing an inclusive, low-threshold, and high participation live streaming ecosystem, rather than stressing high tipping or stimulating spending. Meanwhile, monetization methods for businesses that employ live streaming as a medium are diverse and constantly evolving. In addition to the traditional virtual gifts, businesses such as live stream e-commerce and recruitment are all grafted on the live stream.
We are also paying more attention to the exploration of industrialization of the live streaming ecosystem.
我们以虚拟礼物收入为主的直播业务从去年下半年开始有所回暖，主要得益于我们优质的内容供给，有效的直播运营提效，推荐技术的不断精进，以及用户和流量的持续增长。具体来看，主要是MPU增长驱动，ARPU趋势相对平稳。近期对于打赏榜单和高峰时段PK等功能的规范化要求，更多是希望减少对打赏的过度引导，这符合我们一直以来坚持普惠引导用户克制打赏的业务方向，对我们的影响应该也更加小。我们认为相关部门出台的政策充分全面地考虑了行业的长期可持续性发展。针对相关规范化要求，我们已经形成了具体的调整方案，相关调整短期对直播收入的综合影响应该在中单位数水平，长期影响会更小。[Foreign language]
Our live streaming business with revenue primarily from virtual gifts, has rebounded since the second half of last year, thanks to our high quality content offering and increased live streaming operation efficiency, constant improvement of recommendation algorithm and continuous user and traffic growth. To be more specific, MPUs has been the key driver, with ARPU staying relatively stable. Recent regulatory requirements on the standardization of functions such as gift ranking or peak time PK, are mainly targeted at reducing promotions that lead to extensive rewards, which is in line with the business philosophy that we have, always had. For example, adhering to the principle of inclusive and guiding users to refrain from high gifting. Therefore, the impact on us should be relatively smaller.
We believe that the standards established by relevant departments have fully taken into account the industry's long-term sustainability and development, and in response to the standardization requirements, we have made a concrete adjustment plan. We expect a mid-single-digit impact of such adjustments on live streaming revenue, and long-term impact should be smaller.
随着行业的发展，各方面的管理必然是趋向于规范化的。对于主播和内容创作者群体来说，像快手一样的规范化企业可以提供更多的健全、规范化专业支持，并且在用户流量、综合变现效率、收入成长空间以及技术赋能方面具有明显优势。我们也有机会吸引到更多优质的主播，长期来看，对生态是利好和健康的。[Foreign language]
As the industry develops, all aspects of management will become increasingly standardized. Regulated companies like Kuaishou, which has distinct advantages in user traffic, overall monetization efficiency, revenue upside and technology empowerment, can provide streamers and content creators with more sound and standardized professional support. We will have the opportunity to attract more high quality streamers, and it is beneficial and healthy for the ecosystem in the long run.