The biggest trend in Chinese social media is dying, and another has already taken its place

Just as discussions about initial public offerings for Kuaishou and Douyin course through the market, live streaming companies are facing slowdowns in user growth and weak earnings guidance,

According to a report released by big data research institute QuestMobile, in June 2018, the number of monthly active users in the live streaming industry declined by 10.8 percent to 91.28 million from 104.1 million in January 2017.

Such a user decline has also hit stock valuations. YY, a leading live streaming company in China, enjoyed a 186.8 percent surge in the company’s share price last year, but its seen its stock decline by more than a third of its value so far this year.

However, the party might not be over yet, at least for e-sports streamers.

“The entertainment-driven live streaming platforms are indeed facing difficulties of growing because the total internet population in China almost stops growing and they face the direct competition from short video apps on user time,” said Jiang. “For them, the peak has already passed.”

“But we are more optimistic on gaming streaming because as China’s e-sports industry is growing rapidly, different genres of games can attract more players as well as audience, and more professional e-sports competitions or leagues are organized by game developers like Tencent as well as streaming platforms like Huya and Douyu,” he added.

Not everyone has given into the trend of short videos, however.

“One day, I found myself doing nothing for the entire morning but watching funny short videos. I decided to remove the app,” said 26-year-old Yang Yaru.

“But in China, many people need such entertainment apps because they are facing too much pressure from work. This is an era of civil entertaining carnival,” she added.

—CNBC’s Xiang Xue contributed to this report.

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