Ximalaya has raised more than US$700 million in nine rounds of fundraising. It is backed by Chinese internet powerhouses Tencent Holdings, Baidu and Xiaomi, and venture capital firms including General Atlantic and Primavera Capital, and entertainment giant Sony Music Entertainment, according to start-up database service Crunchbase.

The decade-long trek to a profit indicates the tough terrain for audio platforms.

Ximalaya withdrew its IPO application with the US Securities and Exchange Commission in the middle of 2021, only a few months after filing in late April, at a time when China was tightening its grip on the overseas listing plans of domestic technology companies and amid rising trade tensions between Washington and Beijing.

Ximalaya then turned to Hong Kong, filing for a listing with the Hong Kong stock exchange in September 2021, before delaying its plans.

According to an updated prospectus filed with the exchange, Ximalaya achieved revenue of 5.86 billion yuan (US$921 million) in 2021, a 43.7 per cent increase on the year before, although its net loss almost doubled to 5.1 billion yuan.

The prospectus also shows that as of 2021, its platform had more than 268 million monthly active users, with 116 million of these coming from its mobile apps and 152 million from other platforms, such as in-car audio systems.

Hong Kong IPO pipeline fills up with Ximalaya, Xintiandi filings

Ximalaya remains one of the bellwethers of China’s online audio sector, fighting off rivals such as Nasdaq-listed Lizhi.fm and Qingting.fm since the mid 2010s. However, the sector has been overshadowed by the rise of short video apps.

Apps such as ByteDance’s Douyin, the Chinese sibling of TikTok and Kuaishou, have taken a much bigger share of user time that used to be spent on music streaming, podcasts and online reading.

Chinese online audio players need to invest in quality content to attract more users and advertisers to propel the sector’s growth, according to Liao Xuhua, a senior consultant who focuses on culture and entertainment at Beijing-based market research firm Analysys.

“[China’s] online audio market has hit a growth ceiling, [the players] need to attract more audio content creators and advertisers for further growth,” Liao said.

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Music becomes primary language for autistic youth in China

Music becomes primary language for autistic youth in China

But Liao added that with more young Chinese netizens becoming car-owners, in-car entertainment will likely become a new growth engine for players such as Ximalaya and Lizhi.

China is the world’s largest automobile market, with total car ownership reaching over 310 million in the first half of 2022. This makes it a hotbed for growth of the Chinese online audio segment, according to a November report by market intelligence firm iResearch.

The report also highlighted the need for players to improve quality of content, with more than half of the users in a survey suggesting lack of variety and creativity of programmes was a barrier to increased usage.

Analysys’ Liao said audio platforms will need to provide more support for content creators, as short video players have, to draw in more users and advertisers.

Podcasting platform Ximalaya to file Hong Kong IPO after shelving US listing

China is the world’s largest online audio market by users – not a surprise perhaps given that it is the world’s most-populous nation – though its penetration rate, at 20.2 per cent, is much lower than 48.7 per cent in the US, leaving the door open for growth, according to Shanghai-based China Insights Consultancy.

The firm also noted that time spent by Chinese users on audio content in proportion to overall time spent on online content has been growing slowly, from 1.1 per cent in 2016 to 5.9 per cent in 2021.

Insights expects this to increase to more than 18 per cent by 2026, thanks in part to increased in-car audio entertainment take-up.