Miaopai, a leading video clip capturing and sharing app in China, claims to have seen daily views surpass 1.7 billion, up from 510 million in late 2015. Daily video uploads have increased from 1 million to 1.5 million in the same period of time.

The app’s growth has been fueled by Weibo, the leading Twitter-like social media and a strategic investor in Miaopai’s parent company Yixia Technology.

Over the past year, Weibo began reporting massive increases in video viewing, seeing a 9.7 times year-over-year increase in video views in the third quarter of 2015. Average daily video views reached 470 million in the first quarter this year and the second quarter saw 235 percent sequential growth.

Meipai, another major short video sharing app, recorded 141 million active users in June, with each spending an average of 32 minutes on the app daily, according to the company. A total of 430 million videos had been uploaded as of June since its launch in May 2014.

While YouTube has long been blocked in mainland China, the country hasn’t had an exact equivalent to YouTube yet. Although a number of local YouTube wannabes allowed user-generated videos from early on and established advertising-based revenue sharing programs later, the user-generated video business has never been significant either in viewership or revenue generation. To be relevant in the China market those sites turned to TV shows, movies and more recently original shows, with a business model close to Hulu’s.

It is believed China’s YouTube will eventually come into being, and its main stage will be on mobile. Miaopai and Meipai were born as mobile apps in 2013 and 2014 respectively. 89 percent of Weibo’s monthly active users in the second quarter accessed the service on mobile, with 68 percent of their ad revenues generated through mobile. Tencent’s QQ.com, the leading online news portal, found that 75 percent of their audiences for the 2016 Summer Olympics watched videos on mobile.

Monetization Is Still In The Early Stages

Before reaching 2 billion daily views in 2010, YouTube was estimated to have generated some $240 million USD in revenue in 2009. By contrast, Chinese short video platforms have just begun monetization efforts.

Miaopai started receiving revenues through some marketing campaigns in the latter half of 2015, Han Kun, CEO of Yixia Technology, said so in an interview. Liu Zhengxin, senior vice president of the company, believed their future revenues for short videos would mainly be from advertising.

China’s online video advertising market increased 48 percent year-over-year to 8.4 billion yuan(about $1.25 billion USD), with more than 60 percent from mobile, in the second quarter this year, according to internet market research firm iResearch. Online video advertising as a percentage surpassed 10 percent of China’s total online advertising sales for the first time ever earlier this year.

But so far almost all video ads are located in long-form videos, such as drama series or game shows, on major video sites. And there’s no tools or services for video ad creation or placement available with any short video platforms or social platforms.

Meipai is heading in a different direction. The app just began generating revenues this past June by enabling viewers to buy virtual gifts to reward content contributors. Virtual gift rewarding, or tipping in essence, has been a widely adaptable monetization approach in China.

Meipai’s parent company expect that new revenue streams will be user-facing offerings such as membership subscriptions. The company also plans to add a social shopping platform to leverage the fashion influencers on their platform in the first half of 2017.

When it comes to the costs, fast-growing video views also mean rapid increases in bandwidth cost. To measure up to the local regulations, Chinese video streaming content providers also have to hire a big fleet of screening staff. Chinese short video and social platforms so far don’t pay any content contributors.

The top players are backed by venture capital money. Miaopai’s parent company announced a $200 million USD Series D funding in late 2015. Meipai’s parent Meitu has raised multiple rounds of financing and has recently filed for an IPO on the Hong Kong Stock Exchange.

Vlogger Stars Are Beginning To Emerge

Of the top ten accounts (by views) on Miaopai’s latest monthly chart, seven emerged in the past 24 months.

Papi Jiang, ranked third, is the only independent creator on the chart. When her self-made mini talk shows went viral on the Chinese web in late 2015, she was a graduate student at a top Chinese drama school. Shortly after that, she received funding from Luojisiwei, an online multi-media content production company, together with a few other local VC firms.

Luojisiwei hosted an advertising auction for her earlier this year that resulted in a reported 22 million yuan (about $3.3 million USD) ad pledge. Now partnering with a famous Chinese talent agent, Papi Jiang recently launched Papitube which allows everyone to submit original videos and promote the selected videos through her own accounts across different video and social platforms.

Few other independent vloggers in China has gained such traction. Bob Ding, the founder of RedBang, a talent agency dedicated to internet star management, believes there’s still a big gap between YouTube stars and Chinese short video creators in both quantity and quality. RedBang is holding the first VidCon-like conference in China together with Yixia Technology, trying to “import” some YouTube stars to China and creating an opportunity for Chinese content creators to learn from successful YouTube stars.

With the possible exception of Papi Jiang, the rest of the top ten accounts on Miaopai’s chart are all run by startups. And most of the startups, including the top two, were founded by traditional media professionals over the past year and a half. All of these fast growing video content startups have received venture capital investment.

Currently it’s not possible to get ad revenue shares from video platforms, though some of them have started experimenting with other monetization approaches such as brand marketing campaigns. Yi Tiao, the No. 2 on Miaopai’s chart, has begun selling physical goods through their accounts on various video and social platforms.

It is believed the short video market can accommodate many more startups and even more creators like Papi Jiang. To promote the development of short mobile videos and related services Weibo and Yixia Technology jointly announced a US$100 million fund in late 2015.

It is reported that thousands of companies from various sectors, ranging from traditional film and TV show production companies to print media veterans, have flocked into the short video production market.

Image credit: Meipai