Zhihu IPO: China’s ‘giant online cafe’ struggles to find monetisation model amid rapid growth
- By the end of last year, Zhihu had more than 43.1 million cumulative content creators who contributed 315.3 million questions and answers
- However, efforts to diversify its revenue streams through new functions, from live-streaming to content e-commerce, have not been very effective
“If Google is like a borderless virtual library, and Facebook is like a never-ending school reunion, then Zhihu is like a massive cafe where millions of people pass through and exchange their views and experiences.”
That was how Zhihu founder Zhou Yuan explained the Quora-like Chinese platform back in 2014.
Fast forward to today and Zhihu – meaning “do you know” in classical Chinese – has become the largest online question-and-answer community in the country. Last week, the Beijing-based company filed an initial public offering application on the New York Stock Exchange.
The Tencent-backed company has ambitions to become much more than a text-based content platform. It has embraced popular multimedia functions such as live streaming and other video content, introduced paid content and membership programmes, and it even offers an online education and e-commerce service.
“Zhihu has gone through many transformations and left Quora far behind,” Kai-fu Lee, a partner at Sinovation Ventures, which owns 13.1 per cent of the Chinese company, wrote on the platform as part of a user discussion ahead of its US listing. “It has the potential to be a super app platform.”
Zhihu is an example of how an elite community can expand into a universal website by attracting users with “fancy tastes” without commercialisation in the initial stage, said Ding Daoshi, director of research at Beijing internet consultancy Sootoo. In the fourth quarter of last year, the company attracted about 75.7 million average monthly active users, a 33 per cent increase from a year earlier.
