turned losses into profits, the era of 号本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本本
In 2018, the video social media company YY.US started a future-oriented change.
If the company's subsequent series of actions are connected together, the main line of this round of change can be captured: focusing on the overseas pan-entertainment market.
When acquiring BIGO in 2019, the founder, CEO and chairman of the company, Li Xueling, , mentioned in an internal letter: In 2018, our company established the basic strategy of comprehensive globalization.
On November 18, Huya Group released its unaudited financial report for the third quarter of 2021.
Judging from the content in the financial report, while the company's basic user base continues to improve, it has also turned losses into profits financially. This shows that the company's current round of changes has passed the early business adjustment stage and entered the stage of improving its profit model.
Going overseas has become the development trend of Chinese Internet companies in recent years. In this case, why Huya Group can achieve both business and financial results will be the issue to be discussed in this report.
01 Growth curve behind the third quarter report
For an Internet company that has been listed, there are two points worth paying attention to in the financial report: user growth and financial data. In the third quarter, Huya Group (hereinafter referred to as Huya) has taken a V-type curve in both aspects.
Currently, the products of Huya are Bigo Live, short video creation platform Likee (formerly Likee short video), and social network platform HAGO.
In December 2020, the Indian government suddenly announced the ban on 118 Chinese apps.
As a member of the Chinese enterprise overseas travel army, Huya’s products are inevitably adversely affected. Judging from the situation in the third quarter, this adverse impact has been partially resolved by Huya.
Among them, Bigo Live's monthly active users' growth rate reversed the previous downward trend. The scale also expanded from 28 million in the same period last year to 31 million. The decline in Likee's monthly active users decreased by 12.4 percentage points month-on-month.
In terms of paid users who are directly related to revenue, the volume and price have increased in this quarter. The scale maintained a 12% growth rate of , which was , from 1.35 million in the same period last year to 1.52 million. The average revenue per user increased from $305.5 in the same period last year to $307.9. The volume and price of paid users of
both increased, directly driving a year-on-year increase in revenue this quarter by 21.7%. In terms of profit
, the gathering in the strategic transformation period achieved a turnaround of losses into profits in the third quarter. Operating profit was US$6.9 million, while operating losses in the same period of 2020 were US$89.3 million.
Non- USGAAP operating profit under was US$31.3 million, significantly exceeding market expectations, while a loss of US$39.5 million in the same period in 2020. The operating profit margin under non-GAAP was 4.8%, and the operating loss rate in the same period of 2020 was 7.4%.
The company's profit turn losses into profits is generally related to cost reduction and efficiency improvement. The reason why Huya achieved profitability in the third quarter is more inclined to the latter.
Currently, Huya’s revenue consists of live broadcast and the other two parts, among which the live broadcast business is the revenue pillar, accounting for 94.2% in the quarter. The live broadcast business needs to be shared with anchors and guilds, which is the company's largest cost expenditure (the other expenditure is bandwidth cost).
Therefore, if the growth rate and scale of live broadcast revenue are higher than the growth rate and scale of revenue costs brought by itself, the possibility of the company making a profit is even higher. This also reflects the company's operational efficiency.
In the third quarter, Huya's revenue cost was US$440 million, while live broadcast revenue in the same period was US$612.2 million; the former increased by 16.1% year-on-year, 3.6 percentage points lower than the latter. This is the case even if the time scale is extended to the same period in 2020, which has lasted for four quarters.
various information revealed in the third quarter shows that when other Chinese Internet companies went overseas to dig out gold, Joy has ushered in their "golden autumn".
02 How can the gathering grow?
The famous financial weekly "Economist" reported the product "BIGO" from Chinese companies in the first issue of the 2021 New Year.
Weekly magazine, with the title "BIGO: Preparing to Welcome the New Generation of Users", explores the changes in global Internet social products and the direction of online socialization of the new generation of netizens.
Dubai landmark building and the world's tallest building - Burj Khalifa , a light show with BIGO as the theme was held almost at the same time. Behind
BIGO is Huya. BIGO was founded in 2014 and was bought by Huya in 2019.
In fact, before acquiring BIGO, Huya had already started to deploy troops overseas. Advanced according to the timeline, Huya also sowed two other seeds for today's achievements in 2016 and 2018 respectively.
The first seed was "Bigo Live" launched in 2016.
To this day, Bigo Live has gone through two growth stages. At first, Bigo Live's product direction was a live video platform, and its business model was very similar to YY Live.
In recent years, the development of Bigo Live has shown a trend of "breaking the circle": both product content and regional scope are expanding.
At present, Bigo Live includes sections based on live broadcasts, adding sub-sectors such as music, games, variety shows, and covering more than 150 countries and regions.
In August, Bigo Live launched several new features. For example, the Bigo Live night market function was launched in Malaysia , which prompted the average number of visits in the live broadcast room to reach 150,000 to 200,000.
Bigo Live also launched the Bigo Marketplace function in Indonesia , Malaysia and Thailand, and the daily active users of viewing in some regions reached 25%. These new measures such as
have enabled Southeast Asia and other regions to achieve strong growth in the third quarter, with revenue increasing by 29.4% year-on-year and paid users increasing by 31.7% year-on-year.
In July 2017, BIGO launched the special effects shooting and editing tool Likee, which has gained 50 million users in 10 months. Similar to Bigo Live, Likee is also "breaking the circle".
Likee has always been centered on empowering users and creating more value for users, and changes in its product form also revolve around this. After choosing video creation tools as the entry point, Likee has gradually developed into a content community.
can be seen that unlike Douyin , which emphasizes public domain traffic platforms, Likee encourages users to operate private domain traffic and provides a large number of supporting support tools, which is rare in the market.
In the third quarter, Likee launched Superlike functions that can inspire creators to publish high-quality content and operate fans in Russia, Indonesia, , Middle East, and other regions. In Russia, Superlike has gained a lot of attention after it was launched on a small scale, and the number of certified creators increased by 7.7% in a single month.
In addition to product innovation, Likee will also launch subscription functions around content creators in the fourth quarter to support and cultivate the development of content creators.
Likee's support for creative content has also attracted more creators to join the community. The number of certified creators in the third quarter increased by 17.1% in the quarter-on-quarter . Meanwhile, Likee's revenue this quarter achieved a high growth of 58.1%. The third chess piece laid by
is HAGO launched in April 2018. Its positioning and subsequent development direction are similar to Bigo Live and Likee.
HAGO takes the game social platform as the entry point, and has more than 25 million monthly active users on the mobile terminal in half a year after it was launched. At present, HAGO is developing towards a multi-person audio and video interactive social platform.
sorted out these three products and found a rule. That is the main development line of the three, both of which are pan-entertainment industries and overseas markets, and their product forms are more easily accepted by netizens in the new era.
is focused enough, supplemented by supporting monetization tools such as Superlike and efficient operational means, and Huya's rapid growth and turn losses into profits are naturally natural.
03 Chinese-style innovation behind profits
At the third quarter financial report call, Huya gave two new views on competition. From these two views, we can find clues about the underlying logic of its growth.
When answering how to view the competitive landscape of overseas live streaming and short video markets, Huya said: In the short term, live streaming may be under some pressure, but in the medium and long term, live streaming companies themselves rely on the income of live streaming business; the advertising revenue of social platforms is the most core and sustainable income model. There will be no direct competition between these two income models.
History has repeatedly proved that when a company enters a new market, if it has rich relevant experience before, the success rate is often higher.
From this perspective, many Chinese companies going overseas have this advantage. However, when all enterprises have an advantage, it will evolve into " involume ". At this time, differentiation has become a breakthrough weapon for enterprises.
's success in overseas markets is due to the differentiated strategies that are different from other companies.
First of all, as a "foreign monk", following the customs in the countryside can bring the distance between the product and the local users, and achieve twice the result with half the effort. The logic of
gathering is that on the one hand, it improves user activity through various operation methods such as variety shows and songs; on the other hand, it improves user experience by optimizing products. The core of these two aspects is localized operations, gathered in more than 30 countries and regions around the world to establish an operation center, with a local operation team of nearly 3,000 people.
In the third quarter, Huya increased its investment in the game.
Bigo Live and Saint Seiya: Awakening jointly held a series of content creators incentive activities in France, hosted and broadcast the FreeFire e-sports league under Garena, in order to create a richer UGC content ecosystem in the terminal game and attract more users to participate. In terms of
products, take Bigo Live as an example.
This quarter, it further improved the user's experience by optimizing the multi-person room broadcast tool and launching new functions such as 12-micron room and small windows. This has increased the number of people who have broadcasted in multiple rooms by 2.3% month-on-month, and the per capita airtime has increased by 5.3% month-on-month.
breaks out of the perspective of the third quarter report, and its localized operation strategy has also made Huya a leader in the industry.
In the APP ANNIE, which focuses on data analysis in the era of mobile applications and digital content, Huya Group ranked second in the revenue rankings of non-game manufacturers released in October this year.
In the first half of 2021, the global social application usage time reached 740 billion hours, equivalent to 44% of the global mobile device usage time. The development space for Huya is self-evident.
Secondly, whether it is live streaming or short videos, Chinese Internet companies have rich and mature experience compared to other regions where the Internet industry is underdeveloped.
From the perspective of product iteration, the iteration logic of Huya’s three major products are all centered on pan-entertainment content. In terms of form, the tool + interactive platform is used as the starting point and meeting user needs as the goal.
Overall, the success of Huya is inseparable from the summary and output of successful experiences.
If the company does not systematically combine successful experience in the Chinese market with localized operations, Huya will not be loved by overseas users and it will be difficult to turn losses into profits. (Author: Wei Yuqi)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-