Could Tencent Topple Momo as the “Tinder of China”? | #facebookdating | #tinder | #pof


_________________________

Tencent (OTC:TCEHY) rules China’s mobile messaging market with WeChat, which serves 1.15 billion monthly active users (MAUs). Its ecosystem of over a million “mini programs” enables users to shop, order food, play games, hail rides, make payments, and more — all without ever leaving the app.

Meanwhile, Momo (NASDAQ:MOMO) is the top online dating platform in China. Its namesake app started out as a social networking app, but gradually evolved into a platform for online dating and live videos.

Momo’s smaller app, Tantan, is essentially a Chinese clone of Match Group‘s Tinder. Momo’s core app had 114.1 million MAUs last quarter, and 13.4 million of them bought virtual gifts or signed up for premium dating services on Momo and Tantan.

Image source: Getty Images.

These two companies generally aren’t considered competitors, but Tencent recently launched three torpedoes at Momo: an anonymous video dating app called Maohu (“Catcall”), a Tinder-like app called Qingliao (“Light Chat”), and a reboot of its Pengyou (“Friends”) app as a social network with an opt-in dating feature. 

What’s Tencent up to?

WeChat’s MAUs grew 6% annually last quarter, but it’s only a matter of time before this ubiquitous “super app” runs out of room to grow in China. Meanwhile, Gen Z-oriented rivals like ByteDance’s TikTok and Bilibili are attracting younger users, while WeChat seems shackled to its reputation as an app for older users.

A recent study by research firm Jiguang found that just 15% of Chinese users born after 2000 posted daily updates on WeChat, compared to 57% of users born in the 1960s. That’s comparable to the generation gap between Facebook and Instagram in Western markets, where parents saturated the former and sent teens scurrying toward the latter. WeChat is also widely considered a “work app,” since managers use it to keep tabs on their employees.

Simply put, Tencent needs new ways to reach younger users, and Momo’s streak of double-digit revenue growth suggests that online dating is still a fertile market.

Meet Maohu, Qingliao, and Pengyou

Maohu, which launched over the summer, lets users chat anonymously with strangers while donning digital masks. Male users can wear the mask for a maximum of five minutes, while female users can wear a mask indefinitely. Once a user removes his or her mask, beauty filters are applied automatically to the live video.

Qingliao, which was introduced in late November, resembles Momo’s Tantan and Match’s Tinder, but doesn’t adopt the swiping mechanic of those two apps. Instead, it simply offers two choices on the right side of each profile — one to “like” it, and another to dismiss it.

Its main page displays a carousel of potential matches, and users can scroll down to view additional information like a user’s occupation, educational background, hobbies, location, and social media postings. The matches are refreshed every 18 hours. The app is currently being tested on an invite-only basis.

A person uses an online dating app.

Image source: Getty Images.

Pengyou, which was relaunched in mid-December, is an updated version of an older social networking app that was discontinued in 2017. The new app resembles Instagram with its dominant feed of single photos, but it splits its feed into three categories — friends, colleagues, and people who live in the same city.

Users need to verify their identities with personal credentials, and they can opt-in for dating matches. This subtle approach is similar to Facebook’s opt-in strategy with Facebook Dating. Like Qingliao, Pengyou is still being tested on an invite-only basis.

Should Momo be worried?

Tencent clearly wants to leverage the strength of its WeChat and QQ ecosystems to gain fresh footholds in the online dating market. This could be bad news for Momo, which struggled with decelerating growth in MAUs and revenue over the past year:

YOY growth

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Q3 2019

MAUs*

17%

14%

11%

5%

3%

Revenue

51%

50%

35%

32%

22%

YOY = Year-over-year. Source: Momo quarterly reports. *Momo only.

Momo’s growth decelerated this year due to allegations of inappropriate ads on its apps. To tighten up those standards, it pulled Tantan from app stores from April to July, and suspended news feed posts on Momo and Tantan from May to June.

Those headwinds have dissipated, but Momo only expects its revenue to rise 18%-20% annually in the fourth quarter. Tencent’s expansion into the online dating market could exacerbate that pain.

Investors shouldn’t assume that Tencent will crush Momo yet, since Momo still enjoys a first mover’s advantage in the market. However, investors should keep a close eye on Tencent’s three new apps — and see if they pull users away from Momo and Tantan.




Source link


_________________________