New frontiers, AI at the forefront of the battlefield: Kuaishou's solution for local life

"The purpose of an enterprise is not to create profit, but to create customers." The view put forward by Peter Drucker more than half a century ago once became the guiding principle in management. As time has passed, it has now become a lifesaver for enterprises facing changes in the macro - environment and the shift of consumer sovereignty.

After the roles of users and consumers have changed from being "prey to be hunted" to "real people", "returning to user value" has once again become a popular topic for enterprises when speaking to the outside world.

Not everyone can truly return to the concept of "people", but there are always those who take the lead.

Recently, Kuaishou's Local Life division held the 2025 Gathering Conference. Xiaogu, the senior vice - president of Kuaishou and the person in charge of the Local Life division, set "the new - tier large market and new AI opportunities" as the strategic coordinates at the conference.

It has to be said that the rise of Kuaishou's Local Life seems to be a natural result. Keywords such as a lively atmosphere, a sense of trust, and urban street - life are almost its inherent genetic advantages. And Kuaishou's efforts in AI technology in the past period show its overall attitude towards technological iteration.

That's why, when Kuaishou tries to use AI technology to help merchants unlock the "new - tier city" built by 700 million loyal users, the future possibilities of the local - life sector have a vivid and vibrant example.

Shift in consumption momentum: The new - tier market opened by trust

If the Chinese consumer market is compared to a forest, the new - tier market (cities at the third - tier and below) is the fertile land once covered by fallen leaves. According to data from Boston Consulting Group (BCG), new - tier cities are home to 70% of the country's population, but currently only contribute 40% of the consumption volume. There is still a multiple - level growth potential in per - capita consumption.

By analyzing the data of the total retail sales of consumer goods in some cities released in 2024, we can find that the year - on - year growth rate of the total retail sales of consumer goods in third - tier and lower - tier cities is higher than that in higher - tier cities and also higher than the overall national growth rate.

As the first - tier market approaches saturation, new - tier cities, like capillaries, have naturally become the main source of business growth. How to seize this rare growth opportunity and keep up with the market trend is a pioneer proposition for many brands and merchants before they start to evaluate and plan their strategies on Kuaishou.

According to official data from Kuaishou, consumers from new - tier cities account for 62% of all consumers in Kuaishou's Local Life.

Consumers in new - tier cities have a stronger demand for "nearby" services. Consumers in first - tier cities may be used to ordering takeaways for their three meals, while users in new - tier cities value "early - morning market discounts at the downstairs supermarket" or "special - price tickets at the nearby cinema" more. These are exactly the benefits and conveniences that local life can bring. For example, Wang Hui, a 35 - year - old mother and a long - time user of Kuaishou's group - buying service, has placed more than 600 orders in a few months, ranging from electric vehicles worth thousands of yuan to fruits costing just over ten yuan. Behind such consumption, Kuaishou's Local Life has become the "supply depot" for her family, reducing the family's monthly consumption by more than 20% while increasing the parent - child companionship time by 20%.

The improvement of living quality makes the rise of local - life services in new - tier cities more of a natural outcome.

The value of Kuaishou lies precisely in capturing this local growth through trust - based connections.

Xiaogu gave an example of Chaoyang, a typical new - tier city in Northeast China, in his speech. In Chaoyang, the user penetration rate of Kuaishou can reach 60%. Relying on this user advantage, the GMV of Kuaishou's Local Life business in Chaoyang, Liaoning, increased by 466% in 2024.

There is a somewhat stereotypical but real situation that in the digital age when the Internet seems to be fully popularized, there is still a large group of users who have never even been exposed to group - buying services - the silent majority whose needs are often ignored.

As a content platform with over 700 million monthly active users, Kuaishou can help more potential consumers discover their new consumption needs. The combination of "high - engagement content + low - decision - making cost" can accurately match needs, enabling the business flywheel to turn, and allowing more merchants, influencers, and service providers to find new possibilities on Kuaishou.

Take the movie - ticketing industry, which has been in a difficult situation in recent years, as an example. During the Spring Festival holiday, the core period from 2023 to 2025, the box - office revenue from third - tier, fourth - tier, and lower - tier cities accounted for more than half of the national total. "After cooperating with Kuaishou, we realized that we had not paid enough attention to new - tier users and had even ignored this group of users for a long time," said Li Qiuzhu, the online - channel operation director of Shoutuji Movie Tickets, which has settled on Kuaishou.

Direct data shows that during this year's Spring Festival holiday, Shoutuji Movie Tickets had a daily transaction volume exceeding 10 million yuan for seven consecutive days. Among them, the consumption of new - tier users accounted for more than 70%.

The choice of 700 million loyal users shows that in an era of over - supply, the simplest business truth remains - the closer you are to users, the greater the opportunities.

Breaking through in the local - life sector: AI as the spearhead in the new - tier battlefield

The saying "Everything in XX is worth doing again in XX" has become a cliche. However, when Kuaishou's Local Life put forward the slogan "All group - buying services are worth doing again on Kuaishou" at last year's Gathering Conference, most brands and merchants were not thinking about "whether it's worth it" but "how much it's worth".

Why are "all group - buying services worth doing again on Kuaishou"?

The answer from Kuaishou's perspective is: the new - tier large market and new AI opportunities.

Deploying on a platform is both simple and difficult. It's as simple as opening an account after settling in. However, the difficult part is that a brand's energy and resources are always limited. Whether to make a heavy investment in a platform often requires sufficient analysis and calculation.

Kuaishou's advantage lies in its ability to accurately integrate merchant services into users' daily scenarios. Through trust - based connections, Kuaishou is becoming a real driving force in the new - tier market.

Data released by Kuaishou at the conference shows that in 2024, the GMV of Kuaishou's Local Life increased by 200% year - on - year, and the number of paying users increased by 100% year - on - year. Among them, cities at the third - tier and below contributed nearly 60% of the transactions, and the year - on - year growth rate of GMV in these cities exceeded 220%.

Several brands showcased at the conference are more convincing.

Behind the continuous growth of Shoutuji Movie Tickets' business is the support of 3.6 million new followers during the Spring Festival holiday. The number of active buyers of Juewei Duck Neck exceeded one million in 2024, and its GMV in Q1 2025 increased by 60% compared to Q4 2024. The new - tier market is the main source of business growth. More importantly, it's not just low - price product categories. For Ninebot electric vehicles, with an average unit price of nearly 4,100 yuan on Kuaishou's Local Life platform, the main growth source last year was new - tier users, accounting for more than 75%.

"Good products, good content, good marketing activities, and good advertising tools" are the four important pillars for merchants to operate successfully on Kuaishou's Local Life.

AI can be a powerful tool integrated into these four aspects to help merchants improve operational efficiency.

On the one hand, Kuaishou's AI technology, represented by the Keling large - model, shows that it has sufficient technological accumulation.

On April 15, the 2.0 versions of the Keling large - model and the Ketu large - model were officially released globally. At the conference, according to Kuaishou, in multiple win - loss ratio evaluations within the team, both models ranked first in the industry. For example, in the field of text - to - video generation, the win - loss ratio of Keling 2.0 compared to Google's Veo2 is 205%, and the win - loss ratio compared to Sora reaches 367%, significantly outperforming its competitors in terms of text relevance, picture quality, and dynamic quality.

Keling AI has established cooperation relationships with thousands of domestic and foreign enterprise customers, including Xiaomi, Amazon Web Services, Alibaba Cloud, Freepik, and BlueFocus. More than 15,000 developers from around the world have applied Keling's API to different industry scenarios, with a cumulative number of generated images of about 12 million and more than 40 million generated video materials.

On the other hand, as a platform strategy that Kuaishou has focused on in the past two years, AI has penetrated into the overall platform ecosystem and been integrated into the real business chain of merchants.

Products are the key to transactions and truly carry the user experience. Facing the consumption characteristics of the new - tier market, which requires both affordability and precision, merchants need to provide products that match consumer needs, have price competitiveness, and can build a good reputation on Kuaishou. It's worth mentioning that Kuaishou's Local Life plans to launch tools such as "AI - powered product listing" and "AI - powered product selection" in 2025 to use AI to improve the efficiency of merchants in product construction and listing, and also hopes to assist merchants in product selection by intelligently determining when, where, and what products to list.

On Kuaishou, content is the starting point of transactions. Kuaishou is exploring content forms more suitable for local life and has achieved results. The focus in 2025 is to make front - line sales staff (professionals) who understand products the main force in content production to deepen trust through professionalism. At the same time, AIGC tools are used to significantly lower the threshold of content production and reduce the content - production pressure on merchants.

For local - life merchants, who are more scattered and have more specific needs, Kuaishou has also adjusted its marketing forms. Moving away from the old rhythm that relied solely on major promotions, it is building a new normal of small - scale promotions with the concept of "regular sales are also marketing". AI is used to improve the platform's marketing efficiency. Through functions such as one - click generation of event pages and materials, the time for marketing preparation is reduced, and the opportunities for merchants to conduct active marketing are increased.

At the same time, the application of commercial marketing and advertising tools can significantly improve the operational efficiency of local - life merchants and boost business scale.

After one - year's iteration, the support structure of commercial products for local - life merchants has been gradually improved. "The advertising product 'Local Promotion' specifically for local - life merchants has launched a group - buying version and a lead - generation version, and the store - promotion function has been launched. In the past six months, the number of merchants using Local Promotion has increased by more than 100%, and the commercial spending has increased by 172%," said Liu Xiao, the person in charge of content and lead - generation advertising products, basic products, and alliance business at Kuaishou's Magnetic Engine.

In addition, for merchants generally facing the practical pressure of "fewer staff and more complex tasks", the efficiency - improvement value brought by AI tools is more prominent.

The performance of the digital employee π, which has been optimized by large - models and industry - specific adjustments, has been significantly enhanced. The private - message management ability brought by π has increased the lead - collection rate of local merchants by more than 20%.

The fast - forward button in the new - tier battlefield

In the battle to capture the new - tier market and break through in the local - life sector, Kuaishou has pressed the "accelerator button" for merchants. The triple driving forces of the platform, users, and merchants are pushing the local - life business into a high - speed development channel.

At the platform level, there is policy and technological support. In addition to AI empowerment, at the conference, Kuaishou's Local Life officially announced that in 2025, it will still invest billions of yuan in cash and hundreds of billions of units of traffic, and launch support programs such as the Blockbuster Product Engine Program, the Content Engine Program, the Marketing Leadership Program, and the Morning Star Program to assist merchants from multiple dimensions such as products and content.

From the user perspective, there is a synchronization between the awakening of users' consumption needs and national policies. The 2025 Government Work Report clearly identified "vigorously boosting consumption" as a key task, and expanding service consumption is an important measure. According to the latest data from the National Bureau of Statistics, in the first quarter of 2025, the retail sales of consumer goods in county - level and rural areas accounted for 40.2% of the total - which is sufficient evidence that new - tier users still have great potential. Relying on its user advantage in new - tier cities, Kuaishou provides an entry point for merchants to focus their efforts.

From the merchants' perspective, there is now an operating platform where they can quickly enter the local - life and new - tier markets. Whether it's a national chain brand, a regional brand, or an individual merchant, they can all find a suitable way to operate on Kuaishou, with options to suit different budgets and needs.

As stated in *The Platform Revolution*, "The most successful platforms are those that create an ecosystem where all participants benefit." In this acceleration process, the beneficiaries are not limited to one party. Users can enjoy quality services and products at a lower threshold, merchants can open up incremental markets more efficiently, and the platform is building a more inclusive, diverse, and people - centered new business landscape.