In the third quarter of 2024, revenue from online marketing services grew by 20.0% year-over-year, reaching RMB17.6 billion, demonstrating the sustainable growth of our online marketing services business. By continuously improving our data infrastructure, smart placement products and algorithms, we achieved a higher placement ROI for our marketing clients, leading to increased bids. Additionally, our large AI models' semantic understanding of marketing content and merchandise characteristics enables us to match users and merchandise more accurately for our merchants, boosting marketing conversion efficiency.
In the third quarter of 2024, revenue growth of our online marketing services was primarily driven by external marketing clients. Marketing spending in media information, e-commerce platforms and local services grew faster year-over-year. In the media information vertical, marketing spending from commercialized short plays grew significantly. We increased user payment conversion rate through high-quality content offerings and the implementation of smart dynamic subsidy strategies, improved placement outcomes for our marketing clients. In the third quarter of 2024, we accelerated the implementation of the In-Apps Ads (IAA, ) short play model, expanding our user base for free short plays. These efforts contributed to a more than three-fold year-over-year increase in short-play marketing spending during the same period. We also introduced differentiated Universal Auto X (UAX, ) placement solutions for various industries and scenarios, enhancing the stability of clients' marketing placements and driving increased budget allocation. As a result, total marketing spending through UAX accounted for approximately 50.0% of overall marketing spending by external marketing clients in the third quarter of 2024.
Revenue growth of our closed-loop marketing services remained robust in the third quarter of 2024. The number of monthly active merchants using marketing placements increased by over 50.0% year over year. We provided simplified, automated marketing placement services for small and medium-sized merchants, enabling them to increase their GMV through marketing placements and significantly improving the retention rate of these merchants. We focused on policy support, product iterations, and algorithm optimizations to improve the operating efficiency of converting short video traffic to live streaming, which increased marketing spending in this scenario by nearly 20.0% year-over-year in the third quarter of 2024. Smart marketing placement is now a critical element of merchants' sustainable operations on the Kuaishou App. In the third quarter of 2024, our omni-platform marketing solution and smart hosting products accounted for approximately 50.0% of total closed-loop marketing spending on the Kuaishou App.
In terms of brand marketing services, we provide clients with integrated solutions that drive both brand awareness and sales conversion through marketing science, KOL recommendations, and customized strategies to attract marketing clients. In the third quarter of 2024, we also capitalized on the Olympic Games Paris 2024 by partnering with over 150 brands, including Yili, China Mobile and FAW-Volkswagen, to support these clients' rapid growth on Kuaishou with innovative marketing solutions empowered by our "sports+" strategy and content ecosystem.
E-commerce
Our e-commerce business in the third quarter of 2024 demonstrated its differentiation and resilience despite the third quarter being a traditionally slow season for e-commerce and ongoing challenges in consumer demand. We maintained strong market presence due to our solid foundation in content-based e-commerce and our strategy to provide "exceptional content, superior product." By strategically refocusing on live streaming e-commerce, further unlocking the potential of short video e-commerce, and steadily expanding our pan shelf-based e-commerce, we are maximizing synergies across multiple e-commerce scenarios. These efforts to boost e-commerce supply, enrich our e-commerce ecosystem and increase user spending drove a 15.1% year-over-year increase in e-commerce GMV to RMB334.2 billion in the third quarter of 2024.
On the supply side, the number of average monthly active merchants increased by over 40.0% year-over-year in the third quarter of 2024. Small and medium-sized merchants' performance on our platform exceeded expectations thanks to our strategic new merchant programs, including the Golden Bounty Initiative ( ), Set Sail Initiative ( ) and Uplift Initiative ( ). These programs help early-stage merchants increase traffic and reduce uncertainties. In the third quarter of 2024, the number of new merchants joining Kuaishou increased by over 30.0% year-over-year. Meanwhile, for existing small and medium-sized merchants, we offered refined methodologies for content-based e-commerce to support various merchants' operating capabilities on Kuaishou, facilitating their long-term business growth. Our merchants' healthy growth enriched our platform's merchandise ecosystem by expanding the number of merchandise categories by over 20.0% year-over-year in the third quarter of 2024 and providing users with a wider selection of high-quality products.
To enhance our content-based e-commerce, we customized operations for KOLs in different tiers. For top-tier KOLs, we introduced marketing features and tools, such as Exclusive Mega Group Buy ( ) and Mega Crowd Deals ( ), to incentivize them to live stream and enhance the value of their content. To support small and medium-sized KOLs, we launched our Rising Star Initiative ( ) in August 2024, which provides cash incentives and traffic support while collaborating with regional service providers for local operations. In the third quarter of 2024, these initiatives helped small and medium-sized KOLs achieve strong growth, increasing their average daily GMV by over 40.0% quarter-over-quarter and average daily number of merchandise sold by over 25.0% quarter-over-quarter. We also launched our Blockbusters Initiative ( ), offering subsidies for selected merchandise to provide users with more affordable, high-quality products. As a result of these efforts, our GMV achieved by KOLs increased by over 24.0% year-over-year during the 818 Shopping Festival. Short video e-commerce also maintained rapid growth, with its GMV increasing by over 40.0% year-over-year in the third quarter of 2024, driven by blockbuster products and live-streaming highlights. Through strategy optimization such as integrating e-commerce contents with marketing materials, and joint modeling of short video traffic and simple live streaming rooms, we achieved a nearly 40% quarter-over-quarter growth in GMV driven by short videos directing traffic to live streaming rooms in the third quarter of 2024.
While stabilizing and growing our content-based e-commerce, our pan shelf-based e-commerce has become an increasingly effective complement. In the third quarter of 2024, pan shelf-based e-commerce GMV accounted for 27.0% of our total e-commerce GMV, and its growth continued to outperform our overall GMV growth, driven by both strong supply and demand. Average daily active merchants and average daily active paying users in our shopping mall grew by nearly 70.0% and over 60.0% year-over-year, respectively, in the third quarter of 2024.
The continued enrichment of our e-commerce supply and ecosystem and increased synergies across e-commerce scenarios further stimulated user demand. In the third quarter of 2024, the number of e-commerce monthly active paying users grew by 12.2% year-over-year to 133 million, continuing the growth trend established in the second quarter which was the peak season. Our diverse marketing strategies, which include 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. By leveraging integrated live streaming and short video content, along with our pan shelf-based e-commerce strategy, we will continue to empower merchants and KOLs to grow holistically and provide a better shopping experience for our users.
Live streaming
In the third quarter of 2024, revenue from our live-streaming business was RMB9.3 billion, with the year-over-year decline continuing to narrow sequentially. As an instrumental component of our content ecosystem and ongoing driver of user engagement, we remain focused on fostering a healthy, sustainable live-streaming ecosystem. On the supply side, multi-host live streaming and other emerging product categories continued to grow. Increasing professionalism and institutionalization of streamers and our partner talent agencies' enhanced operational capabilities supported this growth, contributing to more refined and effective content delivery. By the end of the third quarter of 2024, the number of our partner talent agencies increased by more than 40.0%, and the number of talent agency-managed streamers increased by over 60.0%, both on a year-over-year basis.
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November 20, 2024 03:37 ET (08:37 GMT)
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