Xiao Ying Technology, a global mobile video production service, signed a listing coaching agreement with Guotai Junan Securities on November 26th.

Shortly after the market received the news, on December 1, Xiaoying Technology announced that it had received nearly 400 million yuan C round financing led by Dachen Caizhi, Dunhong assets and Wuyue Capital.

Many people can't help but wonder, who is Xiaoying Technology? In fact, Xiaoying Technology's products such as VivaVideo (Xiaoying), VivaVideo Pro (Xiaoying Pro), VivaCut, SlidePlus (Little Shadow), Tempo, etc. are not well known in China, and VivaVideo's list of free photography and videos in Apple Inc's app store in mainland China is well over the top 50. On the short video clip track, there are not only professional players with strong tool attributes such as VivaVideo Shadow, Inshot, Vue, etc., but also short video head enterprises also pay attention to this and continue to increase the size one after another.

Why is it that Xiaoying Technology has gained popularity abroad, but it is unknown at home? Only one year after the launch of Screenshot and Kuaiyin, the downloads in Apple Inc's app store are steadily among the top 10. It is not difficult to find that the traffic drivers behind them are its "mother's family" short video platforms Douyin and Kuaishou Technology. Does Xiaoying's dismal ranking mean that the decline and decline of instrumental APP like Xiaoying is quietly starting?

Leaning against a big tree is easy to enjoy the cool, but editing tools are difficult to live alone.

According to public data, Xiaoying Technology's overseas revenue alone exceeded 100 million RMB in 2020 and has a compound growth rate of more than 50% in the past three years. In 2020, VivaVideo ranked fourth in the list of China short Video / Live AP Revenue Top20 released by SensorTower in the first half of 2019.

It is not difficult to find that Xiaoying Technology is more outstanding overseas performance, its domestic development is not strong, does this have anything to do with it as a tool platform?

A more classic case is Meitu. The company also started as a tool, with 450 million monthly active users at its peak in 2016, but only 220000 paid users, accounting for less than 0.05%. The resulting revenue accounts for less than 5% of the total revenue, and its biggest problem is poor liquidity.

First, the frequency of use is low, even if it has the advantage of traffic, but the use of social software only stays in the picture, and the user leaves after using it, which makes it lack the opportunity to deeply explore the value of users; second, similar free products on the market basically cover the daily needs of users, and the user experience is good, which makes it more difficult to charge users. When the content cash mode of short video platforms such as Douyin and Kuaishou Technology sprang up, Meitu still failed to make up for its shortcomings and extended its business to short video terminals, resulting in a massive loss of users and making it more difficult to cash out.

So, if you want to talk about the cash ability of editing such a tool APP, you have to say the importance of a short video platform.

The most typical cases are the byte-beating "clip" and Kuaishou Technology's "Fast Shadow". The commercial positioning of the two products relies on the short video platform, obtains users from the short video platform, and then feeds the traffic back to the short video platform, both of which are completely free. mainly realized through the content of the short video platform.

It was edited and released on App Store in May 2019, but the number of downloads is not high. It was not until the updated version on Aug. 18 that the screenings directly indicated that it was an official Douyin editing artifact that the number of downloads increased. According to Qimai data, the number of daily downloads is estimated to exceed 33w. In addition, the video clips shared on Douyin will receive a bonus on official traffic.

The downloads of Kuaiying surged within one year, and the estimated daily downloads exceeded 46w on August 20, 2019. The application description of Kuaiying in the product says that "Kuaiying can help you become popular with Kuaishou Technology and enhance the attractiveness of your works", implying that behind it is the Kuaishou Technology platform.

These two examples prove that the short video platform is indispensable for the promotion of editing software. no matter clipping or fast film can directly create revenue, it can only be realized by draining to the short video platform. the editing software is further extending in creating a matrix with short video as the main body, and the editing software bundled with short video platform has incomparable advantages in cash-out mode.

The business positioning of Xiaoying Technology is as a professional editing tool, which is realized by charging users a fee, but the realization model has fatal defects.

First of all, the editing software is highly homogeneous and has all kinds of basic functions, which can already meet the basic needs of Chinese public users. Users naturally tend to use free products, and the final release platforms are still concentrated on Douyin and Kuaishou Technology. However, Xiaoying does not have the traffic advantage of the official editing software. Second, it is unlikely that the company will develop its own short video platform, because according to the forward-looking Industry Research Institute, Douyin and Kuaishou Technology will have a market share of 56.7% in 2019, with high market concentration, obvious head effect and little space left. Finally, even if Xiaoying Technology seeks to cooperate with short video platforms, it will be difficult to achieve, as popular short video platforms tend to launch their own editing tools such as Bilibili's "must cut" and Baidu, Inc. 's short video SDK clip.

It can be seen that Xiaoying Technology's own business positioning is not accurate, and the way of cash realization is not in line with the habits of Chinese users. People more often use editing software as an auxiliary tool, and do not form a consumer awareness of such tools APP, and Xiaoying Technology can not cut in from the short video platform, so the way to realize Xiaoying Technology is difficult to break, so sustainable management ability is a little worried.

It is a trend to be replaced by short video platforms, and overseas growth is difficult to sustain.

Focusing on overseas, unlike at home, the short video platform has not yet fully developed editing tools. For example, Youtube's video editor only has audio and cutting functions, leaving enough market space for editing tools to survive.

On the other hand, Xiaoying Technology focuses on video editing and uses technology and innovation to create product differentiation advantages.

Unlike the simplification of cut, fast film products and performance, the vertical division of the company's products is more refined. For example, VivaVideo is for the general public, Tempo focuses on template special effects, VivaCut is an advanced editing tool for professionals, and SlidePlus can make photo albums into beautiful film recording effects. The company covers the demand scenario module at multiple levels, and the functional perfection of different levels of products is different. Mass editing and templating tools help ordinary users to easily create and meet basic editing needs. High-end editing and dynamic album tools give professionals more powerful video editing capabilities, with better music and film editing, processing and output, can easily achieve smooth transition and immersive special effects.

Moreover, Xiaoying Technology's products basically migrate from PC to mobile, making it easier for people to play with the functions of shooting, editing, previewing and sharing. For example, the advanced editing tool VivaCut has a full range of editing functions, which can adjust hue, saturation, brightness, RGB and HSL curves in addition to basic functions such as cropping, stitching, zooming, animating, etc. VivaCut can refine the film on the mobile phone, and its effect can be docked with PC tools such as AE and PS to meet the creative needs of professionals.

In addition, Xiaoying Technology adopts the member subscription model, which has become mature in overseas editing tracks, surrounded by strong competitors. For example, Adobe Inc Creative Cloud packaged its editing products such as AE and PS, and began to shift from copyright sales to user subscription model (that is, SaaS model) in 2013. After a brief decline, revenue began to usher in a qualitative leap, with revenue growth rate of more than 20% in the past four years.

Will Xiaoying Technology, which has 1 billion global users, be just a flash in the pan?

For short video platforms, editing tools are an important layout of the future, and players of short video "bosses" have begun to extend their tentacles to editing tools, such as Youtube launching Youtube Cutte and overseas version Douyin (Tik Tok) launching overseas version of Viamaker. Looking to the future, just like the development history of Chinese tool APP, the homogeneous free editing tools on the market reduce Xiaoying's competitive advantage, and the use of Xiaoying technology is limited by editing, which makes its use time and frequency are not high, but the editing tools bundled with short videos have stronger user stickiness, and the realization mode is still the biggest weakness of Xiaoying technology. Moreover, if Adobe Inc's AE and PS can be quickly migrated to mobile, or if homogenous editing tools such as InShot, VideoLeap, and VLLOVUE launch popular style features, Xiaoying's overseas business may be in jeopardy.

Conclusion

Generally speaking, the contrast microcosm of Xiaoying and silhouette and Kuaishou Technology is the confrontation between tool matrix and video accessory software, which is not driven by the core effect of short video platform, and its commercial value can not be brought into full play as an affiliated editing function.

In China, where editing tools go hand in hand with short videos, and the realization mode of short video content has matured, small film technology will be difficult to sustain.

However, the reason why Xiao Ying Technology has developed overseas is that overseas short video platforms have not developed or improved editing tools, and overseas users' subscription cash-out model has developed well. However, editing tools are very important for the layout of short video platforms. When short video giants enter the editing track on a large scale and use high-quality content to drive tool traffic, the stickiness of users to Xiao Ying will decline, and the decline of tool platforms will repeat itself.