How China’s internet companies are turning online love into offline cash
The search for love online isn’t only good for lonely hearts - it’s also a boon for Chinese internet companies riding off the digital dating trend
The millions of Chinese searching for love online might not end up finding someone special, but mainland internet companies won’t be feeling too heartbroken.
With around 200 million single adults in mainland China, there’s plenty of demand for digital dating and there’s a range of companies turning the online hunt for love into offline cash.
These range from traditional “swipe right” style apps to YY’s interactive dating show and Momo’s live broadcast videos.
Momo, which started life as China’s answer to Tinder, has seen huge growth thanks to its platform which allows users to broadcast everyday experiences and chat to other users nearby.
Some people are using this for entertainment - but others are turning these online interactions into offline dates, HSBC’s Chinese internet analyst Chi Tsang told the Post.
Last year, Momo saw US$134 million in revenue, which may grow to US$443 million this year and US$837 million next year, all driven by live broadcasting which is expected to make up 63 per cent of this year’s revenue, according to HSBC estimates. Alibaba, which owns the South China Morning Post, has a 27 per cent stake in Momo.
The Nasdaq-listed platform generates cash from users tipping video hosts, with the top 50 users contributing 8 million renminbi (HK$9.14 million) or 13 per cent of a week’s revenue, according to HSBC.
Users are motivated to tip as their cash gifts are visible to other users, and Tsang expects paying users to continue to grow as total users grow.
“In big cities you have all these migrant workers, who might have a problem finding a date in a tier-one city. If you’re a migrant worker, you’re not going to be hanging out in Sanlitun trying to compete with bankers,” Tsang said.
He believes online dating will continue to grow thanks to the demographics of China, where there are around 34 million more men than women.
Online dating is now the third biggest business sector for YY, making up 14 per cent of total revenue for the Nasdaq-listed company this year.
The live-streaming site uses the format of China’s popular dating television show Feichang Wurao to match up lonely hearts.
“The online dating service started to generate revenue in 2014 and exceeded core music and entertainment services revenue during the first year of operations,” Bank of China analyst Thomas Chong said.
Online dating brought in 173 million renminbi for the company in the third quarter of last year, but that’s forecast to grow to 271 million renminbi in the third quarter of this year - a 57 per cent increase thanks to a 43 per cent year-on-year increase in paying customers, he found.
People in Beijing and Shanghai are very busy, they don’t have time to find partners
That’s a larger percentage growth than music revenue - 43 per cent - and gaming, which is set to decline 4 per cent.
Ipsos director Joshua Chang, who is based in Beijing, said the number of online dating service providers had grown from five to 10 companies five years ago to around 2,000 today.
He expects revenue from the dating market to continue to grow.
“People in Beijing and Shanghai are very busy, they don’t have time to find partners. It’s very convenient for them. People here want everything quick - they want to meet someone very quick, get married very quick, have a child very quick,” he said.
Selling advertising is a way for companies to make more profit, as many of the users are single and have money to spend on lifestyle purchases, Chang said.
But offline connections are still important, even in a time when matches can be made in an instant, said Violet Lim, the founder of in-person matchmaking service Lunch Actually, dating app LunchClick and online dating service eSynchrony.
Her app, which is available in Singapore, Malaysia and Hong Kong, doesn’t allow people to chat before hand, instead enabling them to set up an in-person date.
“Dating is ultimately an offline activity,” she told the Post. “You can’t just keep chatting to each other online.”
“In the past, securing a date was a big deal,” she said, reflecting on the decade she had been in the industry. “Dates have become a commodity.”
Lim said online daters often filter their potential lovers on things that don’t really matter, like speed of reply and ability to chat online.
“Our focus is really on pushing people offline,” she said. “People are feeling technology has enabled us, it has empowered us, to connect more quickly in terms of finding more matches, but technology has also made dating more complicated.”
