Kuaishou Technology, the once-unrivaled pioneer of China’s short-video landscape, finds itself caught in a painful structural paradox. Despite reporting record-breaking adjusted net profits of 20.6 billion RMB for 2025, the company’s market valuation remains a mere fragment of its 2021 peak. The market is no longer rewarding the "first-mover advantage" that Kuaishou once leveraged to dominate social commerce.
The company’s e-commerce GMV growth has plummeted from a searing 78% in 2021 to just 15% in 2025. Meanwhile, its arch-rival, ByteDance-owned Douyin, now commands a market volume nearly three times its size. This deceleration has prompted a tactical retreat in transparency, as Kuaishou announced it will cease disclosing quarterly and annual e-commerce GMV figures starting in 2026.
This shift in reporting mirrors the behavior of aging giants like Alibaba and Pinduoduo, signaling a quiet admission that the era of explosive user-driven expansion has reached its terminal velocity. Kuaishou's user base has effectively hit a ceiling, with monthly active user growth slowing to a trickle and daily active users showing a net loss of 8 million in the final quarter of 2025.
Facing a stagnation in its core business, CEO Cheng Yixiao has staked the company’s future on "Keling," a proprietary generative AI video model. Keling has been elevated to a top-tier strategic priority, reporting directly to the CEO. Kuaishou is attempting to reinvent itself as an AI-driven tech powerhouse to find a new growth engine beyond traditional short video and live streaming.
However, the financial cost of this pivot is staggering. The company plans to funnel 260 billion RMB into AI infrastructure and development, a figure that significantly exceeds its current annual profits. This aggressive spending comes at a time when ByteDance’s new Seedance 2.0 model is already outperforming Keling in terms of monthly active users and viral adoption.
The market’s reaction to these ambitions has been notably cold. Following the latest earnings call, Kuaishou’s stock tumbled 14% in a single day as major financial institutions from Morgan Stanley to HSBC slashed their target prices. The prevailing investor sentiment suggests that while AI might represent the future, the road to monetization is too long and the competitive field too crowded to justify the current burn rate.