Good day, ladies and gentlemen. Thank you for standing by. Welcome to Kuaishou Technology Q3 2024 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 Mr. Matthew Zhao, VP of Capital Markets and IR at Kuaishou Technology.
Thank you, Operator. Good evening. Welcome to our Q3 2024 financial results conference call. Joining us today are Mr. Cheng Yixiao, Co-founder, Chairman, and CEO, and Mr. Jin Bing, Chief Financial Officer. Before we start, please know that today's discussion may contain forward-looking statements which involve a number of risks and uncertainties. Actual results and outcomes may differ from those discussed. The company does not undertake any obligation to update any forward-looking information except as required by law.
For all important information about this call, including forward-looking statements, please refer to the company's public information or the Q3 2024 results announcement ended September 30th, 2024, issued earlier today. During today's call, management will also discuss certain non-IFRS financial measures. These are provided for additional information and should not replace IFRS-based financial results. For a definition of non-IFRS financial measures, a reconciliation of IFRS to non-IFRS financial results, and related risk factors, please refer to our third Q3 results announcement. 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 a consecutive interpreter during the Q&A session. Please note that English interpretation is only for convenience purposes only. In the case of any discrepancy, management states the original language will prevail.
Lastly, unless otherwise stated, all currency units mentioned are in RMB. And now, hand the call over to Yixiao.
Hello, everyone. Welcome to Kuaishou's Q3 2024 earnings conference call. In Q3, despite a challenging macro environment, we grew our user base and delivered solid financials by staying committed to our tech-driven, user-centric business philosophy. We achieved a milestone of over 400 million DAUs, and our total revenue grew by 11.4% year over year to RMB 31.1 billion. Revenue from our core commercial business, including online marketing services and other services, primarily e-commerce, increased by nearly 20% year over year. Adjusted and net profit rose 24.4% year over year to RMB 3.9 billion, showing our ability to increase profitability. We strengthened our content and commercial ecosystem by deeply integrating and applying large AI models across content creation, understanding, and recommendation scenarios.
In Q3, daily spending with AIGC marketing materials peaked at RMB 30 million. In September, we unveiled our latest video generation model upgrade, Kling AI 1.5, setting new industry benchmarks for video quality with a video resolution of 1080p, dynamic performance, motion responsiveness, and feature enhancements such as motion brush. Next, I'll discuss our key business developments in Q3. First, user growth and ecosystem construction. In Q3, average DAUs on the Kuaishou app reached 408 million, and MAUs reached 714 million, increasing 5.4% and 4.3% year over year, respectively. This further solidified our leading position as the third largest app in China. The average daily time spent per DAU on the Kuaishou app was 132.2 minutes, while total user time spent rose 7.3% year over year. Average daily live streaming and short video views reached nearly 110 billion.
Executing our strategy of high-quality user growth, we enhanced our capabilities in leveraging marketing channels for user acquisition, optimized product features, and integrated user acquisition initiatives with commercial scenarios like e-commerce. As a result, we expanded our user base and drove more frequent user engagement. We enhanced our monetization-domain traffic allocation efficiency by refining our content distribution mechanism, creating stronger alignment between content and revenue growth. To boost user retention, we optimized features to foster fun, community engagement, and a positive social atmosphere. For example, we enhanced private messaging across multiple scenarios, introduced creative features like the virtual pet, Huazai, and refined common rankings. We also focused on improving the overall experience of our platform's less active user algorithm enhancements, also deepening our user retention by modeling diverse user interests, user-to-user relations, and key drivers for opening up our app.
On the product side, upgrades like a redesigned sidebar and enhanced user experiences drove up user satisfaction. In terms of content operations, we built a unique multifaceted ecosystem by developing specialized content verticals aligned with users' interests, supporting standout creators with our unique features, and expanding our reach with high-profile events. In the sports vertical, as rights-holding broadcaster of the Paris Olympics, we curated extensive content lineup, including panoramic on-demand event coverage, exclusive proprietary IP, interactive features, and diverse user-generated content to bring users an all-encompassing Olympic experience. Olympics-related content on Kuaishou garnered 310.6 billion impressions during the event, with 640 million users tuning in and generating 15.89 billion interactions. To engage young users, we live-streamed online concerts featuring Teens in Time and Hatsune Miku in Q3. Live streaming sessions from the two TNT concerts achieved a combined 950 million views.
For our search business, we optimized the search results page to improve accuracy and user experience, significantly increasing user penetration in search. In Q3, average MAUs for the Kuaishou searches exceeded 500 million. Average daily searches climbed by over 20% year over year to over 700 million, and daily searches peaked at over 800 million. User search behavior also gave us valuable insights into their needs, driving rapid growth in our revenue-generating business related to searches. Second, online marketing services. In Q3, revenue from online marketing services grew 20% year over year to RMB 17.6 billion, achieving over 20% growth for the sixth consecutive quarter, highlighting the segment's sustainable growth momentum. By continuously improving our data infrastructure, smart placement products, and algorithms, we delivered higher placement ROI for our clients, leading to increased bids.
Additionally, our large AI model's systematic understanding of marketing content and merchandise features allows us to match users and merchandise more accurately for merchants, boosting marketing conversion efficiency. In Q3, revenue growth in our online marketing services was primarily driven by the external marketing services, with spending in social media information, e-commerce platforms, and local services industries outpacing the overall market growth year over year. For paid short placement media information, we offered high-quality content tailored to different age groups of targeted audiences, increasing user payment and conversion rate and improving placement outcomes for clients through our smart subsidy strategies. We also accelerated our in-app SaaS for Short Plays model, expanding our user base for free Short Plays and providing clients with more diverse revenue opportunities, leading to over 300% growth in Short Plays marketing spending year over year.
We introduced a differentiated universal auto UAX placement solutions, leveraging end-to-end smart capabilities, including infrastructure, creative generation targeting, and adjustments to enhance the stability of clients' marketing placement and increase budget allocation. As a result, total marketing spending through the UAX accounted for around 50% of the external marketing spending in Q3. Closed-loop marketing services revenue grew in Q3, with monthly active merchants using marketing placements increasing by over 50% year over year. Our automated marketing placement services helped small and medium-sized merchants expand GMV and improve retention rates. We focused on policy support, product iterations, and algorithm optimization to enhance the conversion of short video traffic to live streaming, increasing marketing spending in this area by nearly 20% year over year in Q3.
Smart marketing placement is now crucial for merchants' sustainable operations on Kuaishou, with omni-platform marketing solutions or smart hosting products accounting for about 50% of closed-loop marketing spending. In brand marketing, we offered integrated solutions to drive brand awareness and sales conversion through marketing signs, KOL recommendations, and customizing strategies. In Q3, we partnered with over 150 brands, including China Mobile, FAW, Volkswagen, leveraging the Paris Olympics to support rapid growth with our sports-plus strategy and content ecosystem. Among these, 60 were new brand clients. Beyond traditional methods like sponsorships and product placements, we also worked with the Magnet Star KOLs for product recommendations, boosting brand exposure through high-quality content. This, aided by precise user profiles and data analysis, helped brand clients expand their reach and increase sales. Third, our e-commerce business. Our e-commerce business showed resilience in Q3, despite it being a slow season and facing consumer demand challenges.
With a solid foundation in content-based e-commerce and a strategic focus on providing exceptional content and superior products, we maintain a strong market presence by emphasizing live streaming e-commerce, unlocking the potential of short video e-commerce, and expanding pan-shelf-based e-commerce. We're maximizing synergies across various scenarios. These efforts boosted e-commerce supply, enriched our ecosystem, and increased user spending, resulting in a 15.1% year-over-year GMV increase to RMB 334.2 billion in Q3. On the supply side, with an industry landscape where supply often outweighs demand, content has become more crucial in driving consumer demand, with more merchants seeking long-term growth on content-based e-commerce platforms. Small and medium-sized merchants exceeded expectations, with the new merchants on Kuaishou increasing over 30% year over year, and their average revenue per store up by more than 60%.
This growth was largely driven by initiatives like the Golden Bounty Initiative, Sail Initiative, and Uplift Initiative, which helped early-stage merchants increase traffic and reduce uncertainties. We leveraged our nationwide partner ecosystem to help new merchants develop their business, focusing on key product categories. For existing merchants, we offered refined operational methodologies to support their long-term business growth. In Q3, average monthly active merchants grew by over 40% year over year. Our merchants' healthy growth enriched our platform's merchandise ecosystem by expanding categories by over 20% year over year and offering users a wider selection of high-quality products. To enhance content-based e-commerce, we customized operations for KOLs. For top-tier KOLs, we introduced marketing tools like exclusive Mega Group Buy and Mega Crowd Deals to incentivize live streaming and enhance content value.
During the 818 Shopping Festival, customers using exclusive Mega Group Buy placed 25% more orders per person than others, while other conversion efficiency for the same product category rose 55% after using Mega Crowd Deals. For small and medium-sized KOLs, we launched the Rising Star Initiative, offering cash incentives, traffic support, and exposure, while collaborating with regional service providers for local operations. These helped them achieve strong growth, increasing their average daily GMV by over 40% quarter over quarter, and the average daily number of merchandise sold by over 25% quarter over quarter. The Blockbusters Initiative provided subsidies for selected merchandise, offering users more affordable, high-quality products. As a result, KOLs' GMV increased by over 24% year over year during the 818 Shopping Festival, with the small and medium-sized KOLs' GMV growing over 27% year over year.
Short video e-commerce also grew rapidly, with the GMV rising over 40% year over year in Q3, driven by blockbuster products and live streaming highlights. In addition, we improved content quality and conversion efficiency, extending the product life cycle through short video embedded shopping links that drove traffic to live streaming rooms. By optimizing strategies like integrating e-commerce contents with marketing materials and joint modeling of short video traffic and simple live streaming rooms, we achieved nearly 40% quarter over quarter growth in GMV, driven by short videos directing traffic to live streaming rooms in Q3. While stabilizing and growing our content-based e-commerce, our pan-shelf-based e-commerce has increasingly complemented our e-commerce business. In Q3, pan-shelf-based e-commerce GMV accounted for 27% of our total e-commerce GMV, and its growth continued to outperform overall GMV growth, driven by strong supply and demand.
Average daily active merchants and paying users in our shopping mall grew by nearly 70% and over 60% year over year, respectively. Thanks to our efforts in integrating blockbuster products and traffic resources, pan-shelf-based e-commerce GMV during the 818 Shopping Festival rose by 45% year over year. Moreover, through engaging blockbuster product live streams and strengthening customer mindshare product-driven branding, we have consistently driven more repeat purchases and reinforced customer mindshare in our pan-shelf-based scenarios. The ongoing expansion of our e-commerce supply and ecosystem, coupled with increased synergies across various e-commerce scenarios, has further stimulated user demand. In Q3, the number of e-commerce monthly active paying users grew 12.2% year over year to 133 million, building on the momentum from the Q2 peak season. Our diverse marketing strategies, which included targeted approaches for new, growing, and mature users, also supported this growth.
Tools such as coupons for live streaming rooms and order incentives have been instrumental in expanding our user base and improving conversion rate and transaction efficiency. Going forward, we remain committed to our user-centric approach, leveraging integrated live streaming and short video content. Along with our pan-shelf e-commerce strategy, we'll continue to empower merchants and KOLs to grow historically. Now, our live streaming business. In Q3, live streaming revenue was RMB 9.3 billion, with the year-over-year decline narrowing further. As a foundational part of our content ecosystem and a key reason users engage with Kuaishou, we remain focused on fostering a healthy, sustainable live streaming ecosystem. On the supply side, we saw increasing professionalism and institutionalization among streamers and refined operational capabilities from partner talent agencies. Multi-host live streaming and other emerging product categories also continued to grow.
By the end of Q3, our partner talent agencies grew by more than 40% year over year, and talent agency managed streamers increased by over 60%. We continue to expand the variety of high-quality content, building on rich entertainment and local cultural content. We focus on niche areas and launch content from various IPs featuring talented streamers such as the Grand Stage and the new episodes of National Arts live streaming programs. By integrating content IP with the local cultural and tourism resources, we help drive the growth of these industries to enhance our gaming live streaming ecosystem. We adopted a comprehensive content marketing strategy, including incubating new games, live streaming game distribution, and cultivating top-tier influencers among others. We also developed gaming content with unique Kuaishou features. In Q3, active gaming live streaming creators exceeded 30 million, boosting the appeal of our diverse top-notch content to live streaming users.
Our live streaming plus services continue to empower traditional industries. For example, we advanced our recruitment real estate services, driving rapid growth in customer reach and transaction scale. In Q3, average number of resume submissions on Kuaishou nearly doubled year over year, and the number of matches grew by over 200%. For Ideal Housing, daily lead generation surged over fourfold compared with the same period last year. Finally, on our overseas business progress, we have set deep roots in Brazil and built strong local market brands by deepening our local content operations. In Q3, we saw steady high-quality user growth overseas, achieving breakthroughs by innovative user acquisition channels and improved user retention. DAUs in Brazil grew by 9.7% year over year. In content operations, algorithm improvements helped highlight premium content across verticals like entertainment, news, and everyday life and sports.
With Kuaishou's strong user base and growing brand influence, we optimized the monetization mechanism for creators. We funded product flow to enhance their earning potential and motivation. Content subsidies also became more efficient, supporting creators' sustainable operations. User activity grew steadily, with the average daily time spent per DAU in Brazil up 4.2% year over year and continued to grow quarter over quarter. In terms of monetization, we continue to enhance marketing clients' experience with improved traffic mechanism and efficiency. While ensuring a healthy ecosystem, we also embedded new traffic scenarios to expand incremental marketing share, leading to year-over-year doubling of online marketing revenue. Total overseas revenues reached RMB 1.33 billion, growing by 104.1% year over year.
Along with this rapid growth, we kept our overseas operations highly efficient under an ROI-driven approach, narrowing our operating loss from overseas business by 75.9% year over year to RMB 153 million in Q3. Additionally, after more than a year of exploring e-commerce business models in Brazil, we made initial progress in terms of products, content services, and transaction efficiency, laying a solid foundation for accelerated growth in our Brazil e-commerce business. In summary, despite external challenges, we're confident that short video remains one of the best industries for growth, given our current user revenue and profit growth, as well as its long-term potential. With a focus on tech innovation and putting users first, we're expanding our business boundaries through ongoing technological advancements. At the same time, we're building a vibrant content and commercial system for our users and partners, powered by better products and high-quality content.
That concludes my preparatory remarks. Next, our CFO, Mr. Jin Bing, will discuss the company's financial performance for Q3. Thank you, Yixiao . In Q3 2024, our average DAUs surpassed 400 million, a significant milestone in our user ecosystem. Driven by our commitment to long-term value, we maintained user-centered, ROI-focused strategies that foster high-quality growth through AI empowerment. As Yixiao has mentioned, AI at Kuaishou has evolved beyond a tool for innovation, serving as a powerful engine driving productivity. It is deeply embedded across our content and commercial ecosystems, helping us stay strong in user traffic, enhance operating efficiency, and strengthen diversified revenue streams. In line with this, we also supported sustained and steadfast investments in AI. In Q3, our total revenue reached 31.1 billion RMB, with revenue from our core business growing nearly 20% year over year.
Our gross margin was 54.3%, and adjusted net profit reached RMB 3.9 billion. These results underscore our core business's fundamental strength and resilience, supported by our ongoing investment in technology that will drive our sustainable growth. Now, let's have a closer look at our Q3 financial performance. In Q3, our revenue grew 11.4% year over year to RMB 31.1 billion, mainly driven by growth in online marketing services and e-commerce business. In Q3, online marketing services revenue increased by 20% to RMB 17.6 billion, from RMB 14.7 billion in Q3 last year, representing 56.6% of our total revenues. This growth was driven by our continuous advancements in data infrastructure, smart placement products, and algorithm optimization, which boosted ROI and stability in ad placements for our clients. Revenue from other services, including e-commerce, reached RMB 4.2 billion in Q3, up 17.5% from RMB 3.5 billion in the same period last year.
This increase was mainly driven by growth in e-commerce GMV, which boosted e-commerce commission income. We achieved notable year-over-year growth in the number of monthly active merchants as we leveraged our strengths in content-based e-commerce and strengthened synergies across omni-domain operations while enhancing our KOL ecosystem and merchant operations. Optimizing the content-based e-commerce experience and expanding merchandise variety stimulated user activity and willingness to buy, driving continuous growth in the number of monthly active paying users. Our live streaming revenue was 9.3 billion RMB, declining 3.9% from 9.7 billion in Q3 last year. We continued to build a healthy, sustainable live streaming ecosystem by promoting the professionalism and institutionalism of streamers, refining talent agency management, and diversifying content offerings, which attracted more users to our platform.
In Q3, our cost of revenues went up by 5.4% to RMB 14.2 billion and accounted for 45.7% of total revenues, mainly due to increased revenue-sharing costs and related taxes in line with our revenue growth, as well as bandwidth expenses and server custody costs. In Q3, gross profit grew by 17% year over year to RMB 16.9 billion. Gross margin was 54.3%, an increase of 2.6 percentage points year over year. Moving to expenses, selling and marketing expenses increased by 15.9% year over year to RMB 10.4 billion, accounting for 33.3% of total revenues. Growth was mainly due to increased spending on business promotions, including short plays in online marketing services and e-commerce business. R&D expenses were RMB 3.1 billion, increasing 4.5% year over year. R&D accounted for 10% of total revenues, dropping from 10.6% in Q3 last year.
Administrative expenses decreased by 11.4% year over year to RMB 800 million, accounting for 2.6% of total revenues, down from 3.2% in the same period last year. The reduction in R&D and administrative expenses was mainly due to lower employee benefit expenses, including related share-based compensation expenses. Group-level net profit for Q3 rose by 50% year over year to around RMB 3.3 billion. Group-level adjusted net profit rose 24.4% year over year to around RMB 3.95 billion, with an adjusted net margin of 12.7%, a 1.3 percentage point improvement year over year. Our balance sheet remains robust, with cash and cash equivalents, time deposits, restricted cash, and wealth management products totaling RMB 86.7 billion as of September 30. Through our enhanced monetization capabilities and efficient working capital management, we generated a positive operating net cash flow of RMB 7.7 billion in Q3.
In Q3, our cost of revenues went up by 5.4% to RMB 14.2 billion and accounted for 45.7% of total revenues, mainly due to increased revenue-sharing costs and related taxes in line with our revenue growth, as well as bandwidth expenses and server custody costs. In Q3, gross profit grew by 17% year over year to RMB 16.9 billion. Gross margin was 54.3%, an increase of 2.6 percentage points year over year. Moving to expenses, selling and marketing expenses increased by 15.9% year over year to RMB 10.4 billion, accounting for 33.3% of total revenues. Growth was mainly due to increased spending on business promotions, including short plays in online marketing services and e-commerce business. R&D expenses were RMB 3.1 billion, increasing 4.5% year over year. R&D accounted for 10% of total revenues, dropping from 10.6% in Q3 last year.
Administrative expenses decreased by 11.4% year over year to RMB 800 million, accounting for 2.6% of total revenues, down from 3.2% in the same period last year. The reduction in R&D and administrative expenses was mainly due to lower employee benefit expenses, including related share-based compensation expenses. Group-level net profit for Q3 rose by 50% year over year to around RMB 3.3 billion. Group-level adjusted net profit rose 24.4% year over year to around RMB 3.95 billion, with an adjusted net margin of 12.7%, a 1.3 percentage point improvement year over year. Our balance sheet remains robust, with cash and cash equivalents, time deposits, restricted cash, and wealth management products totaling RMB 86.7 billion as of September 30. Through our enhanced monetization capabilities and efficient working capital management, we generated a positive operating net cash flow of RMB 7.7 billion in Q3.
Additionally, we actively implemented our shareholder return strategy during the nine months ended September 30, 2024. We repurchased approximately HKD 3.98 billion worth of shares in aggregate, or around 91.11 million shares, accounting for about 2.1% of our total shares outstanding at the beginning of this year. Looking ahead, we'll continue to prioritize user needs, deepen technology, business synergies, and actively explore diverse growth revenues. This initiative will strengthen our competitive edge in ever-changing markets and create long-term value for our users, partners, and shareholders. This concludes our preparatory remarks. Operator, please now open the call for questions.
请先用中文提出您的问题，再将您的问题翻译成英文。 We will now begin the question and answer session. To ask a question, please press star one on your telephone keypad. To withdraw your question, please press star two. Please ask your question in Chinese first and repeat your question again in English.
我们现在进入问答环节。第一道问题来自于 Goldman Sachs 的 Lincoln Kong。 Your first question comes from Lincoln Kong of Goldman Sachs. 请提问。 谢谢 Cheng
先生接受我的提问，也恭喜公司取得了很不错的三季度业绩。我就想问一下关于公司在 AI 这边的一些发展，那可不可以请公司再跟我们多说一下在 AI 大模型这边最新公司的一些进展，尤其是可灵在目前上线之后，有没有什么可以分享的业务或者财务方面的数据，未来的这个商业变现的方向应该怎么样去思考。 So thank you, Cheng, for taking my question and congrats on the solid quarter. Could Cheng share with us some latest progress of the AI large language model, especially regarding Kling AI? Are there any business, operational, or financial data you can share, and what will be the direction of monetization going forward? Thank you. 谢谢你的问题。那本季度呢，我们在持续优化基础大模型各种性能的同时，呢，深化我们大模型在内容理解、内容推荐、内容生产和在用户互动方面的应用。那在我们基础大模型方面，我们在研发 KwaiYii MOE 模型，在总参数量仅数百亿规模的情况下，模型预训练阶段多个指标都超过了 Kuai 1750 亿，模型大幅降低了模型训练推理成本，也能更好地适配 Kuaishou 现有的业务场景。而我们的可灵大模型呢，也在短时间内经历了多次迭代，9 月发布的可灵 1.5 模型支持原生 1080p 视频，并可在可控生成方面升级了镜头控制、手尾针控制、运动笔刷、对口型等多种能力，持续地保持行业领先地位。
Thank you for your question. In Q3, we further optimized the performance metrics of our foundation large models and deepened their application in content understanding, recommendation, production, and user interaction. We are advancing the Kuai LLM MOE model, which uses a mixture of experts approach.
Despite having only tens of billions of parameters, it surpassed the Kuai model with 175 billion parameters across multiple pre-training metrics. This significantly reduced the cost of training and inference while making the model better suited to Kuaishou's existing business scenarios. Kling AI has also undergone numerous iterations in a short time. In September, we introduced the Kling AI 1.5 model, which supports native 1080p video. We also developed and upgraded a range of controllable generation capabilities, such as camera lens control, first and last frame control, Motion Brush, and lip syncing, solidifying our industry leadership. 关于大模型的应用呢，在内容理解方面，我们继续推进大模型技术，在短视频、直播、评论、商业化和电商等等场景，多场景都进行了落地，取得了在用户留存、商业化消耗和电商 GMV 等多个方面的进展。在内容推荐领域呢，我们升级后的推荐大模型技术为我们的大盘带来了显著的增长。而在内容生成及互动方面，本季度 AIGC 营销素材消耗继续提升，日均消耗数超过了 2,000 万，而互动助手 AI Kuai 也融入了包括奥运竞猜、用户私信和评论区互动等更多场景。MAU 峰值也突破了 1,800 万。 Regarding applying large models for content understanding, we consistently expanded their use across various scenarios, including short video, live streaming, comments, advertising, and e-commerce. These efforts drove improved user retention, marketing spending, and e-commerce GMV.
In content recommendation, our upgraded large model technology notably increased overall user time spent on our platform. As for content creation and user interaction, spending with AIGC marketing materials continued to rise, with average daily spending surpassing RMB 20 million in Q3. Our interactive assistant AI Kuai has also been integrated into more scenarios, including Olympic medal prediction, user private messages, comment section interactions, with peak MAUs exceeding 18 million. 接下来呢，我将给大家介绍一下可灵 AI 的业务进展。自今年 6 月发布以来，可灵 AI 已经有超过了 500 万的用户，累计生成了超过 5,100 万个视频和超过 1.5 亿张图片。9 月可灵 AI 的月活跃用户超过了 150 万，可灵 AI 的用户自然留存率逐步的提升。近期我们也上线了独立 APP，方便用户的使用。 Next, I'd like to provide an update on Kling AI's progress. Since its launch in June, Kling AI has accumulated over five million users and generated more than 51 million videos and over 150 million pictures. In September, Kling AI's MAUs surpassed 1.5 million, and organic user retention improved steadily month over month.
We also launched a standalone app recently to make user access even easier. 在商业化变现端呢，可灵 AI 自 7 月底陆续向国内和海外的用户推出了会员付费体系，为用户提供差异化的模型效果体验。同时，我们也在 9 月底正式开放了 API 服务，涵盖了视频生成、图像生成和虚拟试穿等模块。目前，可灵 AI 的商业化进展符合我们的预期，单月流水超过了千万人民币。未来我们还将探索更多元化的变现体系，我们有信心在明年实现可灵收入规模的快速增长。 On the monetization front, at the end of July, we began gradually rolling out a subscription membership offering for Kling AI's domestic and international users, providing them with the model's more tailored performance capabilities. At the same time, we officially opened our API services at the end of September, covering modules such as video generation, image generation, and virtual try-on. So far, Kling AI's early commercialization has met our expectations, with monthly cash revenue exceeding RMB 10 million.
We will explore more diverse monetization tools and models in the future, and we're confident Kling AI will see rapid revenue growth next year. 我认为人间性的 AI 大模型跟快手现有业务场景的结合能够产生巨大的商业价值。未来我们将努力打造团队的 AI 算法能力，争取实现算法创新和场景应用的新突破。 We firmly believe combining AI large models with Kuaishou's existing business scenarios will generate tremendous commercial value. Going forward, we plan to build our team's AI algorithm capabilities to achieve algorithm innovation and scenario application breakthroughs. Thank you. Next question, please, Operator.
下一道问题来自于 Jefferies 的 Thomas Chong。 Your next question comes from Thomas Chong of Jefferies. 请提问。
晚上好，谢谢公司接受我的提问。我们看到在本季度 DAU 超过 4 个亿，然后看到单用户时长也超过 130 分钟。我们应该如何看待下来 DAU 跟时长的趋势和目标？我们有哪些举措可以继续增大了我们的大盘的流量？ Thanks, Management, for taking my questions, and congratulations on a very solid set of results. In this quarter, Kuaishou has over 400 million in terms of DAU, and the time span per DAU exceeding 130 minutes. How should we think about the trend and target for DAU and user time span going forward? What measure does the company have in place to continue increasing the overall traffic? Thank you.
谢谢你的问题。2022 年的 3 月，我们首次提出了 DAU 破 10 亿的中期目标。围绕该目标，我们通过精细化的用户增长策略、高质量的多元内容供给、产品以及算法的持续优化迭代等措施，在各年用户增长和维系费用总额保持相对平稳的情况下，实现了 DAU 和时长的稳步增长，并在第三季度实现了平均 DAU 破 4 亿的里程碑目标。
Thank you for the question. In March 2022, we announced for the first time that our medium-term DAU target was to reach over 400 million. Together, we refined our user growth strategies, provided high-quality, diverse content, and consistently optimized and iterated our products and algorithms. As a result, we achieved steady growth in our DAU and user time span metrics while maintaining total user growth and relatively stable retention costs each year, ultimately reaching our 400 million plus average DAU milestone. Looking ahead to the next phase of our DAU growth plan, we think new user acquisition will be more challenging as short video penetration rates continue to grow. That said, we can still do a lot to improve user retention and activity. Regarding time spent, we are focused on enriching content and enhancing the efficiency of our algorithm recommendations.
We believe these efforts give users a greater sense of value, which matters more than merely increasing average daily time spent. 关于流量增长的具体策略呢，我主要想分享三个方面。首先，在流量分配策略上，我们将继续推进品牌机制升级，促进商业内容和自然内容同向，实现综合收益最大化，并通过流量倾斜扶持优质内容供给，促进社区的健康发展。其次，在产品优化上，我们将巩固快手家在社交和私域的护城河，探索更多创新的互动玩法，提升社区的互动氛围，并通过评论区体验和搜索功能优化，强化用户产品心智。最后，在内容运营上，我们将围绕用户打开理由，打造快手用户喜欢的优质垂类内容，如此具有快手特色的标杆创作者，并通过有影响力的热点大事件实现用户的破圈。 On specific strategies for traffic growth, I'd like to share three points.
First, in terms of our traffic allocation strategy, we will continue to upgrade our traffic distribution mechanism to align commercial and organic content, maximizing overall revenue. Traffic support for high-quality content will also help foster healthy community development. Second, on product optimization, we will strengthen our competitive edge by consolidating Kuaishou's moats in social networking and the private domain while exploring more innovative interactive features to increase the community's interactive atmosphere. At the same time, we will fortify users' product mindset through better comment section experience and search functionality.
Lastly, for content operations, based on developing various reasons for users to open the app, we will produce exceptional vertical content that resonates with Kuaishou's users and support standout creators whose content represents Kuaishou's distinctive brand while leveraging influential major events to reach a broader audience. 总之呢，我们对未来继续实现流量稳定增长仍然保持有信心。更重要的是，我们希望能够为用户创造更多的产品使用场景，提供更优质的内容和服务，成为对更多用户而言有趣且有用的内容平台。 In short, we are confident we will continue seeing steady traffic growth. In the future, more importantly, we hope to create more product usage scenarios for users, provide higher quality content and services, and become an engaging and useful content platform for more users. Thank you. Next question, please, Operator.
下一道问题来自于 UBS 的 Felix Liu。 Your next question comes from Felix Liu of UBS. 请提问。
谢谢管理层接受我的提问，也恭喜我们公司三季度的业绩。我的问题是关于在线营销，注意到近期短剧对我们线上营销业务的增长贡献较大，想请问一下管理层如何思考短剧广告的这个增长的持续性，以及我们公司对于线上营销业务未来的增长策略能否做更多的分享。 Thank you, management, for taking my question, and congratulations on the strong Q3 results. My question is on your online marketing business. We noticed that Short Plays has recently contributed greatly to your online marketing services growth. How should we think about the sustainability from this new ad vertical and the commitment shared in your latest growth strategy for online marketing going forward? Thank you.
谢谢你的问题。如你所说，那伴随着短剧行业的蓬勃发展，短剧行业的营销预算增长也成为了拉动我们快手线上营销业务大盘增长的重要驱动力。第三季度快手短剧的营销消耗同比增长超过了 300%，但外循环消耗大盘的比例也达到了双位数。近期单日消耗峰值也突破了 4000 万。这主要得益于我们通过自律链路的服务、自建链路的不断优化，提升用户体验，并通过自动化补贴提升付费规模。此外，我们在本季度加速跑通 AIA 模式，迅速扩大短剧的兴趣人群，以 AIP 和 AIA 模式双轮驱动短剧的营销消耗高速增长。 Thank you for the question. As you said, associated marketing budgets expanded with the thriving Short Play industry. This has also become an important driver for the overall growth of Kuaishou's online marketing business. In Q3, Short Play's marketing spending on Kuaishou grew by over 300% year over year, accounting for a double-digit share of overall external marketing spending.
Peak daily marketing spending also recently surpassed RMB 40 million. This is mainly due to the optimized user experience, thanks to our refined native sales funnel and increased paying users from smart subsidies. In addition, we accelerated the use of the IAA model in Q3 and rapidly expanded the demographic interested in Short Plays, fueling a high-speed growth in Short Play's marketing spending through IAP and IAA models. 关于短剧业务的持续性，我们对其在中期实现稳健增长保持乐观。我们关注到有第三方的数据预测，2027 年短剧市场规模有望突破 1000 亿元。随着短剧供给生态的逐步丰富，现有超过 5 亿短剧人群仍有进一步商业化的基础，且短剧人群渗透率还有提升的空间。而对于快手来说，我们不仅有丰富的短剧供给生态，同时有超 3 亿的短剧用户基础。通过产品和算法的不断提升，我们认为快手的短剧 IAP 和 IAA 模式的营销消耗都能够保持快速的增长。
As for the sustainability of the Short Play business, we are optimistic about its prospects for steady growth in the medium term. According to third-party data forecasts, the Short Play market could exceed 100 billion RMB by 2027. As the Short Play supply ecosystem continues to expand, there is potential for further commercialization among the over 500 million existing Short Play users, with room to increase the Short Play penetration rate. For Kuaishou, we already have a rich Short Play supply ecosystem and a Short Play user base of more than 300 million. With these advantages, plus the support of our continuous enhancements to products and algorithms, we expect Kuaishou Short Plays' marketing spending through both the IAP and IAA models to sustain rapid growth.
接下来呢，我再给大家简单分享一下我们线上营销业务的主要增长策略。在内循环方面，我们将着力提升内容、货品和用户的匹配和触达，通过扎实做好模型预估，提升内容电商素材的转化效果，并引导商家从短视频到直播做长效的经营。在外循环方面，我们将重点发力，包括短剧、快手小游戏和小说等在内的原生内容型广告，给用户带来极致体验，提升用户对于平台的粘性和营销客户的投放 ROI。在品牌方面，我们将依托营销科学对于用户精准理解，帮助营销客户找到潜在的用户，并通过达人种草和定制招商等方式，为客户提供品效合一的品牌营销解决方案。 Next, I'd like to briefly talk about the main growth strategies for our online marketing business. In terms of closed-loop marketing services, we are working to better match content and merchandise with users.
With the meticulous refinements to our model predictions, we can enhance the conversion of content-based e-commerce materials and guide merchants to engage in sustained operations from short video to live streaming. As for external marketing services, our focus is on native content advertising, including Short Plays, Kuaishou mini games, and online literature. Our goal is to give users a compelling experience, enhance user stickiness, and maximize ROI for marketing clients at placements. On the brand side, we will leverage our deep understanding of users grounded in marketing science to help marketing clients identify and reach their target audiences.
We will also offer clients brand marketing solutions that integrate brand awareness and sales conversion through KOL recommendations and customized strategies to attract clients. 最后呢，我们在行业精细化运营、智能营销产品和算法优化等方面还有较多的提升空间。同时，我们也逐步看到了大模型应用在营销推荐场景的收益，为客户带来更好的投放 ROI。此外，我们也对线上营销服务的收入持续获得市场份额，非常的有信心。 Lastly, we still have a lot of room for improvement in refined industry operations, smart marketing products, and algorithm optimization. Meanwhile, we are seeing the increasing benefits of applying large models to marketing recommendation scenarios, driving better ROI for clients. As such, we're confident that we can continue to gain market share and grow our online marketing services revenue. Thank you. Next question, please, Operator.
下一道问题来自于 Citi 的 Brian Gong。 Your next question comes from Brian Gong of Citi. 请提问。
好的，谢谢管理层接受我的提问。首先恭喜非常不错的业绩。我的问题是想很快问一下关于这个电商双十一的情况，就是能否请管理层分享一下我们双十一期间整体的一个表现，以及我们的主要的策略是什么。谢谢。那我很快翻译一下。 Thanks Manchun for taking my questions and congratulations on the decent results. My question is regarding e-commerce. Could Manchun share the overall performance during the Double Eleven sales promotion and the company's main strategies? Thank you. 谢谢你的问题。在当前消费需求挑战仍存的大环境下，我们对今年双十一大促的表现还是相当满意的。依托内容生态与泛货架场域的全面爆发，我们电商双十一购物节 GMV 同比强劲增长，再创新高。我们提供了超过 200 亿的流量补贴、20 亿的用户红包和 10 亿的商品补贴，赋能更多的商家在快手上实现更好更快的增长。今年快手双十一期间报名参加快手双十一购物节活动的商家数量，今年首次突破了 300 万个，创历史新高。电商新增用户数超过了 700 万人。
Thanks for the question. We are pretty satisfied with our performance during this year's Double Eleven sales promotion, especially given the ongoing consumer demand challenges. By capitalizing on the momentum of our content-based scenarios and pan-shelf-based e-commerce scenarios, we achieved strong year-over-year growth in e-commerce GMV during the event, setting a new record high. We provided over 20 billion video views in traffic subsidies, RMB 2 billion in user subsidies, and RMB 1 billion in merchandise subsidies, empowering more merchants to realize better and faster growth on Kuaishou.
During the event, the number of merchants and KOL sign-ups for our Double Eleven sales exceeded 3 million for the first time, and we acquired more than 7 million new e-commerce users during the event. 今年双十一期间，我们的大促补贴和运营机制重点回归了内容厂，回归了直播间，带来万粉主播开播率显著的提升。GMV 成交破百万的直播间就超过了 2,500 个，挂车短视频发布量同比增长 10 倍。同时，我们在内容厂更加注重营销玩法建设。具体来看，对于头部商家及达人，我们主要以粉丝号召力跟种草为主，重点推出粉丝购物团玩法，提升粉丝和主播的互动性和粘性。对于中药部达人及商家，我们提供了天降红包等玩法，助力大促期间大厂爆破。此外，对于货架型商家，我们更多提供流量与资源补贴，用任务激励和招商策略，保障好的商品获得更好的收益。
During the Double Eleven sales promotion, our promotional subsidies and operational mechanisms focused on content-based scenarios and live streaming rooms. This drove a notable increase in the live streaming penetration rate among streamers with over 10,000 followers. It also propelled the number of live streaming rooms, with GMV exceeding 1 million to more than 2,500, and led to a 10-fold year-over-year increase in the release of short videos with embedded shopping links. We also placed more emphasis on marketing features in content-based scenarios. Specifically for top-tier merchants and KOLs, we prioritized follower engagement and product recommendations, introducing Mega Group Buy to boost followers' interactions with streamers and build loyalty.
For small and medium-sized merchants and KOLs, we provided surprise subsidies and other features to facilitate sales breakthroughs in large-scale promotional events. Additionally, we offered more traffic and resource subsidies for shelf-based merchants, ensuring quality products received better returns through task incentives and merchant engagement strategies. On the merchandise side, we integrated a subsidy budget across the platform to ensure the products in our content-based scenarios had equivalent price advantages. Meanwhile, we categorized the platform's key promotional products, including newly launched products during the season, preferred products during the promotional period, and core blockbuster products online, as well as top-performing products from various brands.
Notably, we excelled in non-standard products such as tea, liquor, health-related merchandise, and jewelry and gemstones, as well as standard products like consumer electronics and household items. Our e-commerce Big Brand Big Subsidy section this year's Double Eleven covered more than 2,200 hot-selling brands across the entire network and more than 2,500 hot-selling categories. During this year's sales promotion, our e-commerce Big Brand Big Subsidy initiative covered more than 2,200 top-selling brands and over 2,500 high-demand product categories. With the national trade-in policy for the home appliances industry gaining more traction in the second half of the year, we believe platforms like Kuaishou have a greater advantage as we cater to diverse customers and their multi-level demands.
During this year's promotion, national subsidies helped to stimulate consumer demand for upgrading old home appliances for new ones. We quickly seized this policy and promoted home appliances trade-in subsidies on Kuaishou in more cities in China. We also optimized the sales funnels for acquiring coupons and order placement conversion. Kuaishou users redeemed over 1.46 million national subsidy e-commerce coupons during the promotion, driving substantial growth in sales across consumer electronics and household categories.
双十一大促相对超预期的表现，让我们对于回归直播间、突破短视频、稳步建设泛货架的电商发展策略更加笃定。展望未来，尽管消费需求疲软和市场竞争加剧的挑战仍然存在，我们相信立足于内容电商的资源禀赋，并坚持好内容加好商品的核心战略的正确性。我们会持续丰富电商供给和生态，助力商家和达人实现全域增长，并在国补等政策的助力下，为企业老铁用户的消费升级做出贡献。 Our robust performance during the Double Eleven sales promotion demonstrated the merits of our development strategy, which calls for fully focusing on live streaming e-commerce, tapping into the potential of short video e-commerce, and steadily expanding our pan-shelf-based e-commerce. Looking ahead, we remain confident despite the challenges of ongoing weak consumer demand and increasing market competition.
By leveraging our resources in content-driven e-commerce and focusing on delivering exceptional content and superior products, we believe we can continue to expand our e-commerce supply and ecosystem. This will also help merchants and KOLs realize full-domain growth. These strategies in support of national subsidies and other policies will help us drive consumption upgrades across our platforms, 700 million MAUs on our platform. Thank you. Next question, please, Operator.
下一道问题来自于 Bank of America 的 Lei Zhang。 Your next question comes from Lei Zhang of Bank of America.
请提问。哦，嗨，管理层晚上好，谢谢接受我的提问。我的问题主要是关于本地生活的，因为有看到我们还是在本地生活上继续投资，然后想看一下管理层如何评估我们最近在这个业务上面的进展，还有是不是有一些中长期的目标可以分享。我自己翻译一下。 Thank you, Manchun, for taking my question. My question is mainly regarding local services. Since we do have a steady fast investment here, so how does management evaluate the process of this business, and do we have any need to long-term goals here? Thank you.
谢谢你的问题。我们从 2022 年开始做本地生活业务的尝试，逐步探索和验证我们的用户有本地生活的需求，到 23 年年终开始做行业加区域化的运营，做大 GMV 和用户规模，再到今年尝试提高变现效率，甚至再到未来预期分层次盈利上岸，每一步都稳扎稳打。Thank you for the question. We've begun exploring the local services business in 2022 and have gradually validated our users' local services needs. By mid-2023, we had started industry-specific and regional operations to grow GMV and expand our user base. This year, we strove to increase monetization efficiency. Going forward, we aim to achieve break-even at the individual city level, and we have made solid, steady progress each step of the way.
本地生活呢，是一个高频业务场景。我们通过给用户提供优质的本地内容和极具性价比的商品和服务，增加快手用户打开快手的理由和频次。我们持续迭代达人分级政策，引导优质的内容生产。同时，坚持浮游打猎，优化流量分发机制，为用户带来更好的体验。我们的用户更注重性价比，所以我们今年针对更优质的核心商品，建设比价能力丰富、比价引擎的应用场景。支付用户规模数持续增长，第三季度日活跃买家数环比持续增长 28%。GMV 也环比保持了 26% 的高速增长。 Local services represent a high-frequency business scenario, where we increase the reasons and frequency for users to open our app by offering high-quality local content and high-value-for-money products and services. We continue to iterate our KOL tiering policy to guide high-quality content production while persisting with the float and hunt approach, optimizing our traffic distribution mechanism to bring a better experience to users.
Our users place more emphasis on value-for-money, so this year, we built richer price comparison capabilities and application scenarios for the price comparison engine targeting higher-quality core products. The scale of paying users continues to grow. In Q3, the number of daily active buyers rose 28% quarter-over-quarter. GMV also maintained a high growth rate of 26% quarter-over-quarter. 在这些方面呢，我们对于本地经营型商家，利用行业精细化多类目探索，以及多激励方式带动更多的广告投入。对于线索型商家，也通过新的广告产品持续提升商家的增量预算投放。第三季度本地业务的收入同比增长超过了 2.5 倍，环比增长 36%。在持续提升补贴效率和运营效率等措施下，收入和成本费用的剪刀差在逐步缩小。所以综合从平台价值考虑，我们觉得本地业务是个值得长期投入的业务，且我们看到了 ROI 在持续改善的趋势。
On the monetization front, we boosted local operation-based merchants' advertising spending by exploring multiple industry-specific categories and various incentives. For lead-based merchants, we persistently increased their incremental budget allocations through new advertising products. In Q3, revenue from local services increased more than 2.5 times year-over-year and grew 36% quarter-over-quarter. The gap between revenue and expenses is gradually narrowing due to our efforts to improve our subsidy and operational efficiencies. So, considering the overall value of the platform, we believe local service is a business that needs long-term investment. We also see a consistent trend of ROI improvement. 中长期呢，我们会坚定地围绕满足用户需求，同时基于我们的用户禀赋，赋能商家实现增长。在维护好用户生态的前提下，重点考量平台价值和给公司带来的增量收入价值。
In the medium to long term, we are committed to meeting users' needs while leveraging our user base to empower merchants to grow. We will focus on platform value and incremental revenue value that the business brings to the company while maintaining a good user ecosystem. Thank you. The last question, please, Operator.
下一道问题来自于 CICC 的张雪琴。 Your next question comes from Xueqin Zhang of CICC. 请提问。
谢谢管理层接受我提问。想请教Bing哥关于 OpEx 问题。我们有注意到公司第三季度的营销售费用是同环比都增长的，那想了解主要的原因是什么？然后展望四季度的话，我们 OpEx 的趋势会怎么样？谢谢。 Thanks, Bing, for taking my question. My question regards OpEx. The company's sales and marketing expense in Q3 increased both year-on-year and Q-on-Q. What are the main reasons? Looking ahead to the fourth quarter, what's the trend of OpEx? Thank you.
谢谢你的问题。今年三季度销售和营销开支相比去年同期有所提升，主要是因为我们增加了线上营销服务和电商业务的投入，而用户增长和维系的费用水平整体是保持稳定的。线上营销服务的投入呢，主要与付费短剧的用户补贴有关。我们以 ROI 为补贴投入的前提，提升了短剧付费用户规模的同时，撬动了几倍于用户补贴金额的客户营销投放预算。我们预计随着用户付费短剧新制的形成以及智能化补贴方案的优化，ROI 还会进一步提升。电商投入呢，主要与用户补贴有关。当然，我们仍然保持相对谨慎的投入。因此，虽然我们的电商补贴金额绝对值有所提升，但补贴金额占 GMV 的比例仍然处于行业相对较低的水平，而且我们的补贴效率也是持续提升的。 Thank you for the question. In Q3, selling and marketing expenses rose year-over-year as we increased our investment in online marketing services and the e-commerce business. The overall cost for user growth and retention remained stable. Our investments in online marketing services mainly relate to user subsidies for paid short plays.
With ROI as the guiding principle for subsidy spending, we not only expanded the paid short plays user scale, but also drove marketing budget allocations from clients that were several times higher than the subsidies we provided. We expect that our ROI will further improve as users develop a mindset for paying short plays, supported by our optimized smart subsidy plans. The investment in e-commerce is also primarily related to user subsidies. We maintain a cautious approach, so even with the increase in our e-commerce subsidies, their proportion to GMV remains relatively low compared to industry standards, and our subsidy efficiency has continued to improve.
销售和营销开支方面，进入第四季度，迎接电商大促季的到来，预计电商用户补贴的绝对金额会环比有所提升。同时，我们在线上营销服务上的投入环比也会略有增加。因此，第四季度的销售及营销开支会像往年一样，预计环比有季节性的增加。研发开支方面呢，我们在 AI 大模型方面的增量投入会带来相关研发人员成本的提高，研发开支环比也会有所提升。但是，销售及营销开支和研发开支占收入的比例环比均会下降。我们相信，随着未来我们持续的提质增效举措的深化，集团的总体盈利能力能够进一步提升，为股东创造价值。 Regarding selling and marketing expenses, as we enter Q4 and prepare for the major e-commerce promotion season, we expect an increase in user subsidies in e-commerce and a slight increase in our investment in online marketing services, both on quarter-over-quarter basis.
As in previous years, selling and marketing expenses are expected to grow quarter-over-quarter in Q4 due to seasonality. In terms of R&D expenses, our increased investment in AI large models will lead to higher costs for related R&D personnel, resulting in quarter-over-quarter growth in overall R&D expenses. However, both selling and marketing expenses and R&D expenses as a share of revenue will decline quarter-over-quarter. As we fortify our quality and efficiency improvements in the future, we expect our overall profitability to further improve as well, creating value for a share of.