The hashtag #TikTokRefugee has already garnered over 78 million views and 2 million discussions on Xiaohongshu, with many new users describing the platform as a mix of Instagram and TikTok.

In just a few days, Xiaohongshu surged to the top of the U.S. App Store’s free apps chart and secured leading positions in Australia, the UK, and the Netherlands.

However, the sudden influx of users has highlighted Xiaohongshu’s recent pivot toward short videos. The platform replaced its “Shopping” tab with a single-column video feed reminiscent of TikTok.

Despite pushback from some Chinese users—who lament the shift toward “Xiao Douyin” (Little Douyin, referring to TikTok’s Chinese counterpart)—Xiaohongshu has embraced the change as part of a broader strategy to enhance its e-commerce capabilities.

A Push Toward Video-Driven E-Commerce

Xiaohongshu’s shift toward short videos isn’t just about appealing to TikTok users; it’s a deliberate move to strengthen its e-commerce ecosystem.

COO Conan Cheng emphasized in late 2024 that Xiaohongshu aims to position itself as a “lifestyle e-commerce” platform. To achieve this, the company has been integrating its community, content, and commerce algorithms to optimize for user engagement and revenue generation.

The transition to short video and livestreaming is critical for fostering consumer habits like livestream shopping, which relies on an instant influx of viewers to drive sales.

The single-column video format reduces user choice compared to the traditional dual-column layout, improving the flow of traffic to livestreams and increasing e-commerce conversion rates.

Xiaohongshu has also been proactive in courting manufacturers and businesses from China’s industrial hubs, such as Guangdong and Fujian, to expand its product offerings.

Unlike its earlier focus on high-end, niche items, Xiaohongshu is now embracing affordable products and mass-market appeal. For example, livestreams featuring low-cost winter boots and casual apparel have gained traction, mirroring the sales tactics popular on platforms like Taobao and Douyin.

Scaling E-Commerce Amid Intense Competition

Despite these efforts, Xiaohongshu faces significant challenges in scaling its e-commerce business. Competition from giants like Taobao, JD.com, and Douyin is fierce, with each platform investing heavily in supporting small businesses and industrial suppliers.

Xiaohongshu has also begun aggressive user acquisition campaigns, targeting not only urban millennials but also older and rural demographics.

Recent initiatives, such as partnering with local governments and offering referral bonuses for new users, have expanded its reach. In addition, the platform’s collaboration with China’s national Spring Festival Gala for a second consecutive year underscores its ambition to become a household name.

However, scaling without diluting the platform’s community-driven ethos will be a delicate balancing act. While Xiaohongshu’s core users value its curated aesthetic and high-quality content, expanding into broader demographics may risk alienating this base.

The Road Ahead for Xiaohongshu

The influx of TikTok refugees may boost Xiaohongshu’s global visibility, but retaining these users poses a challenge.

Many new users are driven by frustration with U.S. tech giants or geopolitical concerns rather than a deep connection to the platform. Cultural differences and regulatory hurdles could further complicate Xiaohongshu’s efforts to sustain its overseas user base.

Moreover, Xiaohongshu’s reliance on livestream shopping to drive e-commerce growth will require substantial investment in infrastructure and partnerships.

Competing with established players like Douyin and Taobao, which already dominate livestream e-commerce, will require Xiaohongshu to refine its value proposition, improve merchant tools, and lower barriers to entry for small businesses.

While TikTok’s turmoil presents an opportunity for Xiaohongshu to capture new markets, the real test lies in whether it can replicate Douyin’s success and build a sustainable e-commerce ecosystem.

According to data from Alibaba Group’s e-commerce and travel platforms, the game’s impact has been felt far beyond the virtual world.

Video Game Sales Skyrocket

On the day of its release, “Black Myth: Wukong” caused a significant increase in video game-related purchases on Alibaba’s Taobao platform, a major C2C e-commerce site in China, according to Alibaba’s blog Alizila.

Video game sales on Taobao surged by 130% compared to the previous week, while searches for the game title spiked nearly 14 times. The game has captured the attention of Chinese gamers with its immersive graphics and engaging storyline based on the classic Chinese novel “Journey to the West”.

The demand for gaming consoles also saw a notable increase, with PlayStation 5 (PS5) sales doubling year-on-year in the week leading up to the game’s release.

The console maintained the top spot in Tmall’s video game equipment rankings for four consecutive days, reflecting the growing enthusiasm for high-quality gaming experiences among Chinese consumers.

Tmall’s game consoles category reported an 80% year-on-year increase in sales, further underscoring the game’s influence on the market.

Additionally, Alibaba’s second-hand trading platform Xianyu experienced a 300% increase in searches for PS5 consoles in August, highlighting the widespread interest in gaming hardware.

Tourism Boom in Shanxi Province

Beyond the gaming sector, “Black Myth: Wukong” has also reignited interest in China’s rich cultural heritage, particularly in Shanxi province.

The game’s stunning visuals, inspired by Shanxi’s ancient temples, carved grottoes, and rugged mountains, have captivated players and spurred a tourism boom in the region. On Fliggy, Alibaba’s online travel platform, searches for Shanxi locations and accommodations doubled month-on-month on the day of the game’s release.

The province, home to three UNESCO World Heritage Sites and the only remaining structures from the Tang dynasty, has seen a 70% year-on-year increase in tourism bookings this summer, according to Fliggy.

This surge includes ticket orders and car rentals, indicating a broad interest in exploring the historical and cultural sites depicted in the game.

Many netizens from Beijing, as well as residents from Shanghai, Zhejiang, and Henan, have been driving searches for Shanxi destinations on Fliggy, eager to experience the real-life locations that inspired the game’s enchanting world.

Broader Implications for China’s Gaming and Tourism Sectors

The success of “Black Myth: Wukong” is a testament to the growing intersection between digital entertainment and cultural tourism in China.

As a single-player game that allows players to explore a richly detailed version of ancient China, it has not only set a new benchmark for gaming experiences but also sparked renewed interest in the country’s cultural heritage.

The game’s impact on both the gaming and tourism sectors demonstrates the potential for digital media to drive real-world economic activity.

According to a survey by gaming industry consultancy Niko Partners, 62% of PC gamers in China reported spending more in the first quarter of 2024 compared to the same period last year, reflecting a broader trend of increased investment in gaming.

As “Black Myth: Wukong” continues to captivate players around the world, its influence on consumer behavior in China is likely to grow, offering a unique example of how digital entertainment can transcend screens and inspire real-world exploration and spending.

This trend could lead to further integration of cultural themes in video games and potentially more collaborations between the gaming industry and tourism sectors to leverage the storytelling power of games to promote travel and cultural appreciation.

In a year marked by economic uncertainties, Weibo Corporation, a key player in China’s social media landscape, reported a nuanced financial performance for the fiscal year ended December 31, 2023. While the company saw a marginal increase in its fourth-quarter revenues, the full-year figures present a complex picture of resilience amid challenges.

For Q4 2023, Weibo’s net revenues amounted to $463.7 million, a 3% increase year-over-year. This growth, albeit modest, is reflective of the company’s efforts to stabilize and grow its advertising and marketing revenues, which also saw a 3% increase, reaching $403.7 million.

The value-added services (VAS) segment recorded a 4% year-over-year growth, underscoring Weibo’s ability to diversify its revenue streams in a competitive market.

However, the fiscal year 2023 painted a more challenging scenario, with Weibo’s net revenues experiencing a 4% decline, totaling $1.76 billion. This dip underscores the broader macroeconomic pressures impacting advertising budgets and consumer spending.

Despite these headwinds, Weibo managed to maintain a 27% operating margin, indicative of its operational efficiencies and cost management efforts.

The announcement of a $200 million special cash dividend reflects Weibo’s confidence in its liquidity and financial health, signaling a commitment to returning value to shareholders despite the prevailing market conditions.

Weibo’s user engagement metrics offer a silver lining, with monthly active users (MAUs) increasing to 598 million by the end of December 2023. This growth, primarily driven by mobile users, highlights Weibo’s continued relevance in China’s digital ecosystem.

However, the broader economic slowdown poses questions about monetization and the potential impact on Weibo’s advertising revenues moving forward.

In reviewing Weibo’s fiscal year 2023, it is clear that the company has navigated a complex landscape with strategic focus and operational discipline.

While the modest growth in Q4 revenues and the expansion of the user base are positive indicators, the overall revenue decline in 2023 points to significant challenges ahead. Weibo’s strategic initiatives, particularly in enhancing user engagement and diversifying revenue sources, will be critical in addressing the economic pressures and maintaining its competitive edge in the dynamic social media market.

Chinese influencer platforms: Weibo, Douyin, Kuaishou, Xiaohongshu

For the fourth quarter, Bilibili reported total net revenues of RMB 6.3 billion ($894.3 million), a modest increase of 3% year-over-year.

This growth reflects the platform’s diversified revenue streams, with significant contributions from advertising and value-added services (VAS). Advertising revenues soared by 28% year-over-year to RMB 1.9 billion ($271.7 million), while VAS revenues increased by 22% to RMB 2.9 billion ($402.4 million).

However, mobile game revenues dipped by 12% year-over-year to RMB 1.0 billion ($141.8 million), primarily due to a high comparison base from the previous year.

The fiscal year 2023 painted a similar picture of resilience and growth, with total net revenues reaching RMB 22.5 billion ($3.2 billion), up by 3% from the previous year.

The growth in advertising and VAS revenues stood out, increasing by 27% and 14% respectively, highlighting Bilibili’s ability to monetize its content effectively. Despite challenges in the mobile gaming sector, which saw a 20% decline in revenues to RMB 4.0 billion ($566.4 million), the company’s broad portfolio of revenue sources helped offset impacts from specific segments.

Bilibili’s focus on cost management and operational efficiency became evident in its gross profit, which surged by 41% year-over-year to RMB 5.4 billion ($766.5 million), reflecting an improved gross profit margin of 24.2% for the fiscal year 2023, up from 17.6% in 2022.

The company also made strides toward profitability, with net loss narrowing by 36% to RMB 4.8 billion ($677.7 million) for the year, and adjusted net loss decreasing by 49% to RMB 3.4 billion ($480.9 million).

A key highlight of Bilibili’s performance is its robust user engagement, with average daily active users (DAUs) reaching 100.1 million in the fourth quarter, an 8% increase from the same period in 2022.

This user growth, coupled with an average daily time spent of over 95 minutes, underscores the platform’s strong appeal and user retention capabilities.

Looking ahead, Bilibili’s management expressed optimism about the company’s strategic direction, emphasizing continued investment in content and creator ecosystems to drive community growth and further monetization.

With a commitment to improving financials and achieving profitability, Bilibili is poised to navigate the evolving digital entertainment landscape with agility and strategic focus.

Top traffic driver compared: TikTok/Douyin vs. Kuaishou vs. Bilibili vs. RED

Douyin live commerce platform is a service platform provided by Douyin for local lifestyle service businesses. It aims to help businesses market and sell their products and services on Douyin.

Short videos were the most popular type of content on the platform, accounting for 83% of total transaction volume. Short video uploads grew nearly 1.4 times, while text content uploads grew 2.68 times.

Douyin Live streaming was also a major growth driver, with transaction volume growing 5.7 times. The number of live streams that generated transactions increased fourfold, and the coverage rate of merchant self-broadcasting reached 59%, with self-broadcasting transaction volume growing 4.45 times.

Daily search volume grew 1.57 times, and transaction volume driven by search grew 2.6 times. The most popular live-streaming content categories were:

• Food: Hot/unique dishes, fast food, hot pot, regional dishes, and bakery and desserts
• Services: Massage and bathing, beauty and fitness, hairdressing, car services, and nail and eyelash art
• Travel: Travel agencies, hotels and guesthouses, theme parks, attractions, and zoos

TikTok also saw significant growth in the number of new service providers and group-buying influencers on its platform. The number of new service providers increased 1.79 times, the number of businesses working with service providers increased nearly two times, and service provider transaction volume grew nearly eight times.

The number of group-buying influencers increased 2.89 times, and over 580,000 influencers earned income from the platform. The total transaction volume of influencers grew more than 2 times, and influencer discovery shopping generated 946 billion yuan in revenue.

Chinese influencer platforms: Weibo, Douyin, Kuaishou, Xiaohongshu

In 2022, the total views of the original content on WeChat Channel (video account) increased by 350% year on year, and the scale of live broadcast increased by 300%, according to WeChat’s data released on 10 January 2023.

The commercial potential of live video broadcasting continues to be released, and the corresponding e-commerce sales increased by more than eight times year on year.

In 2022, the number of daily active creators and the average number of videos uploaded by the video account increased by more than 100% year on year, the number of creators with at least 10,000 fans increased by 308%.

The number of video account earners increased by 101%, and the total income of live video anchors increased by 447%.

Live video GMV increased by more than 8 times year on year in 2022, and the average selling price exceeded 200 yuan. Among them, the top three categories of consumption are covered by clothing, food, and beauty.

The monthly active users of WeChat Search have increased to 800 million, and the total search volume increased by 54%. Mini Programs are widely used in scenic spots, hotels, airports, and other fields, and the number of WeChat Mini Programs has increased by 183%.

WeChat Search contributed to 27% of Official Account follower growth and 20% of Mini Program’s new daily active users. Its contribution to WeChat Channel follower growth has increased by 120%.

WeChat MAU

Over 330 million of WeChat’s (known as Weixin in China) 1.2883 billion monthly active users use video calling. 780 million users are on the social networking section WeChat Moments and 120 million publish updates. The content network WeChat Official Account has 360 million users.

WeChat has evolved from an instant messaging app to a service meeting the digital needs of over 1.27 billion MAU in Q4 2021. Each day, more than 120 million active users post in social networking Moments, 360 million users read Official Accounts articles, and 500 million users access Mini Programs (Q1 2022) daily.

For Q4 2021, WeChat daily active advertisers expanded by over 30% year-on-year. Over one-third of Moments’ advertising revenue was generated from advertisements using Mini Programs as landing pages and advertisements connecting users to customer service representatives via WeCom.

WeChat Video Accounts’ time spent per user and total video views more than doubled year-on-year as Tencent enriched content diversity and enhanced the product experience.

WeChat Mini Programs

The daily active users on WeChat Mini Programs reached 450 million according to WeChat official data in January 2022. The transaction volume of catering, tourism, and retail increased by 100% year-on-year. Mini Program DAU reached 500 million (Q1 2022).

The number of Mini Program developers has exceeded 3 million.

In 2020, the daily active users of WeChat Mini Programs exceeded 400 million, according to its official data shared at its annual event WeChat Public Lecture.

The number of mini programs used per user increased by 25%, the average transaction value per user grew by 67%, the number of programs with transactions increased by 68%, and the annual transaction volume of more than doubled in 2020.

In 2020, more than 100 million people purchased in shopping malls and department stores on WeChat Mini Programs. With the help of mini program pre-sale + offline self pick-up mode, more than 300 million users purchased fresh fruits and vegetables.

WeChat Mini Programs overview

WeChat Games

In 2020, the commercial realization of WeChat mini games increased by 20%.

Last year, the proportion of male and female users in the distribution of mini games accounted for 50% respectively. 40% of the users in the first and second-tier cities, and 65% of the users aged 30 and above.

Compared with 2019, the per capita game duration of mini games increased by 50%, and the average number of games played increased by 20% in 2020.

China game live streaming revenues to double by 2021

WeChat Search

The number of monthly active users of WeChat search has reached 700 million according to WeChat official data released in January 2022.

WeChat search staff said that in the mobile Internet era, search should not be limited by the search box, but need to be accessible by the touch. Users can search while chatting.

WeChat search will screen out the high-quality content of WeChat and produce a more accurate connection with users.

In the future, it can expand the search scope to the whole internet-based the needs of users. The search results are currently mostly provided by WeChat Official Account and Sogou.

Top search trends in China

WeChat Pay

In January 2022, WeChat shared the latest progress on WeChat Pay:

• 23 thousand monthly service providers
• Over 10 million merchants
• More than 1800 banks and Payment institutions
• 23 thousand monthly merchants
• In the next three years, WeChat Pay will continue to carry out digital upgrading of WeStore, with a planned investment of more than 10 billion yuan

In 2020, Zhifufen, a credit score on WeChat Pay, saw more than 240 million users. It boosted the conversion rate of e-commerce orders by 14% and the repurchase rate of retail merchants by 73%.

In 2021, WeChat mini stores and Zhuanzhuan (a secondhand-goods marketplace) will integrate Zhifufen.

In the e-commerce industry, WeChat Pay’s Zhifufen enables post-payment after receiving the delivery and faster refund. Users can quickly receive a refund after submitting return logistics information.

As of January 2022, more than 50% of users have activated Zhifufen, whose solutions cover more than 3000 industries. WeChat Pay unit cooperates with the e-commerce industry on “buy first and pay later”, which has been used by more than 100 million users.

Zhifufen also announced the launch of audio and video members’ services such as “watch first and pay later”, which helped solve the problems that bothered audio/music and video users to deduct fees in advance and forget to terminate their contracts.

China’s online payment users penetration reaching 86%

Enterprise version of WeChat: WeCom

In 2020, there were 80,000 enterprise WeChat partners, with a year-on-year growth of 400%. 

Acquire, convert, and retain customers through WeChat Ads + WeChat Work (WeCom)

According to WeChat, search ads will support six promotion goals, including WeChat Official Account promotion, sales lead collection, products promotion, branding events promotion, app promotion, and WeChat Mini Games promotion.

It supports three landing page types, namely, native promotion page, WeChat Mini Program, and custom link. And, based on the search ability of WeChat, WeChat search advertising can support the sale of brand keywords, keywords words, generic keywords, and generic keywords.

At present, Tencent’s mobile search advertising scenarios mainly include WeChat Search and QQ Browser search. In these scenarios, advertisers can do brand and performance marketing.

Since the launch of search feature on WeChat in 2017, it has been at the top of the main interface.

However, after five years of iteration, it has now become a “global search” that includes WeChat Moments, Official Account, and Mini Programs from the early days when it could only search local chat records and contacts.

At the same time, the search scope has also expanded to all content and services related to search queries in WeChat.

WeChat Mini Programs Insights

Zhihu’s average monthly paying members reached 8.5 million in Q2 2022, representing a growth of 78.3% YoY.

The average monthly paying members for 2021 was 5.1 million, representing a growth of 114.8% from 2020.

Its total revenues were RMB836.0 million (US$124.8 million) in the second quarter of 2022, representing a growth of 31.0% over the second quarter of 2021. The increase was driven by the expansion of Zhihu user base and the increase of its average revenue per MAU.

• Advertising revenue was RMB237.6 million (US$35.5 million)
• Paid membership revenue was RMB271.2 million (US$40.5 million)
• Content-commerce solutions revenue was RMB240.5 million (US$35.9 million)
• Vocational Training revenue was RMB46.1 million (US$6.9 million)

The rise of paid digital content in China

Zhihu’s gross profit was RMB399.6 million (US$59.7 million) in the second quarter of 2022, compared with RMB376.6 million in the same period of 2021.

Net loss was RMB487.0 million (US$72.7 million) in the second quarter of 2022, compared with RMB321.1 million in the same period of 2021.

As of June 30, 2022, Zhihu had cash and cash equivalents, term deposits, restricted cash and short-term investments of RMB7.0 billion (US$1.0 billion), compared with RMB7.4 billion as of December 31, 2021.

Zhihu just became a public company listed on the New York Stock exchange during the first quarter of 2021. Read its profile here.

China social media users’ content preference by education levels

Among non-internet companies, the top three advertisers are L’Oreal, Unilever, and P&G in 2021 with a total ad spend of 3.35 billion yuan, 2.97 bn yuan, and 2.04 bn yuan respectively.

Total ad spend in display advertising decreased further in 2021 by 7.6% YoY.

Read more on China’s digital advertising insights here.

Net income attributable to HUYA Inc. was RMB524.4 million (US$81.4 million) for the third quarter of 2021, compared with RMB253.0 million for the same period of 2020.

Non-GAAP net income attributable to HUYA Inc. was RMB180.0 million (US$27.9 million) for the third quarter of 2021, compared with RMB361.2 million for the same period of 2020.

The average mobile MAUs of Huya Live in Q3 2021 increased by 14.7% to 85.1 million, from 74.2 million in the same period of 2020. The total number of paying users of Huya Live in the third quarter of 2021 reached 6.0 million, compared with 6.0 million in the same period of 2020.

China eSports market overview and forecast

The launch of Mini-Game “Jump” (Tiaoyitiao)  made WeChat Mini-Programs (or WeChat Apps) an instant hit in early 2018. On average, 230 million users used WeChat Mini-Programs daily, 60 million more than 2017. It is estimated to exceed 350 million by the end of 2019.

Read the latest insights on WeChat apps and mini programs here.

WeChat’s Mini-Programs has covered over more than 200 industries and provided over 100 billion times of requests. The sector of public services has been available among 362 prefecture-level cities and created over 500 billion commercial value. The total transactions were 600% more than a year ago.

At the end of 2018, over 2.3 million WeChat Mini-Programs has gone online since its launch in January 2017, which increased by nearly 300% from early 580 thousand.

In terms of the total number of applications, WeChat took less than two years to surpass Apple’s App Store, which held 2.1 million apps with ten years. Aldwx.com’s Mini-Programs data statistics platform forecasts the total mini-apps on WeChat will surpass 5 million by the end of 2019.

It is becoming more and more difficult for a mini-programs to get enlisted in the top 100 ranking on WeChat.

Tongcheng-eLong and Pinduoduo took the first two spots in December 2018. 34% of the top 100 mini-programs turned out to be newcomers. On average, 30% of the top 100 would be replaced by new ones every month in 2018.

All WeChat mini-programs attracted more than 8 billion yuan (US$1.19 billion) from 110 funding rounds led by 120 investment agencies. The figure was eight times higher than it was in 2017.

Offline retail and online shopping mini-programs were the two most popular areas, which together accounted for nearly 70% of total funding.

9 Brands see great results from WeChat Mini Program live streaming campaigns

The advertising market of WeChat Mini-Programs is projected to grow from 5 billion yuan in 2018 to 20 billion yuan by 2019. The retail transactions made with WeChat ecosystem is to exceed 3 trillion yuan by 2019.

Following the launch of Nearby Mini-Programs feature, some leading retailers have successfully connected online marketing scenarios with offline. For example, IKEA WeChat Mini-Program saw 2.26 million visits in 24 hours on the day it went online.

On average, each user accesses WeChat Mini-Programs 4.25 times a day and spends 8.7 minutes on it. WeChat Mini-Programs has seen 600 million users as of the end of 2018. 72% of WeChat users have used WeChat Mini-Programs; 34% of whom used it frequently.

Business guide to WeChat Mini Program live streaming

WeChat Apps Usage Scenarios

53% of users use WeChat Mini-Programs mainly for temporary usage, 40% didn’t want to download mobile apps, 33% are automatically redirected to it after scanning QR code or clicking, and 31% just want to give a try.

User profile & usage preference

Among WeChat Mini-Programs users, 58% were men, 70% under 40 years old, 76% college educated or above, and 52% lived in tier-3 or lower tier cities.

42% of users played Mini-Games on WeChat, 39% used lifestyle services mini-programs, and 28% viewed news.

Specifically, those aged 17 years or younger mainly used WeChat Mini-Games. Users between 18 and 49 years old like to use Mini-Games and lifestyle service mini-programs. And, older users over 50 years old prefer news mini-programs, such as People’s Daily, and lifestyle service mini-programs.

Out of the 69 entry paths to access WeChat Mini-Programs, chatting, sharing, search, QR code, and shortcuts are most frequently used.

44% of users chose shortcuts from My Mini-Program in the main chat interface, 40% accessed from friends’ sharing (especially preferred by older users), and 35% entered through Official Account redirection.

Usage scenarios

53% of users use WeChat Mini-Programs mainly for temporary usage, 40% didn’t want to download mobile apps, 33% are automatically redirected to it after scanning QR code or clicking, and 31% just want to give a try.

Mini Program platforms in China: WeChat vs. Alibaba vs. Baidu

In the eyes of users, what makes WeChat Mini-Programs attractive is its ease to use (60%), no need to download apps (57%), no RAM usage (31%), and convenience to share with friends (28%).

71% of users have shared Mini-Programs to others because they deem it valuable (57%), they were asked by friends (22%), or attracted by rewards (15%).

56% shared practical tools for office collaboration, 48% shared interesting contents to create topics and enhance interactions, and 32% shared Mini-Games to show gaming advancement, earn red envelops, or invite someone to compete against themselves, etc.

30% of WeChat users have used Mini-Programs to shop. 43% of them are willing to download apps, 40% found the product offer was cheaper, and 34% were redirected from posts on WeChat Moments.

However, some program designs affect users’ experience while shopping, such as profit-provoking shares and useless vouchers.

Users’ impressions on WeChat Mini-Programs

For those not using WeChat Mini-Programs, 30% found it not easy to find the one they want as many users mainly get access from friends’ sharing. 25% found the interface choppy especially when they played Mini-Games. And, 23% are worried about a specific function because it seems only useful for temporary usage.

Overall, users hold positive impressions toward WeChat Mini-Programs. 44% of users thought Mini-Programs could replace apps for occasional usage, 36% believed it could help save the smartphone storage, and 32% only viewed it as a tool.

40% of users expect WeChat Mini-Programs to improve the interface switching fluency between chat and mini-programs. 37% expect more useful mini-programs. And, 37% wish it more active in interactions.

One-third of users are willing to download the app after they have a try with a mini-programs. However, most of the users are primarily provoked by profits to download the app.

WeChat’s new social e-commerce platform integrates Shopping Accounts

Tencent Music’s Paying ratio increased to 9.9%, up from 8.0% and 9.0% in the third and fourth quarters of 2020, respectively. Its mobile MAU for online music platforms saw a decrease of 6.4% YoY in Q1 2021 to 615 million.

Tencent Music upgraded its products to be more social, personalized, and visually appealing during the first quarter of 2021:

• Putong Community has continued to gain popularity, growing in user penetration and retention rate quarter-over-quarter, and has become one of the leading channels for fan-idol interaction and content promotion.
• Kugou Fans Club has also drawn many leading artists, labels and content IPs to interact with their fans live, resulting in an increasing proportion of young users in this community, as well as sequential increases in penetration and time spent per user.

For long-form audio, it made noteworthy progress in both integrated and standalone approaches, as well as its monetization during the first quarter of 2021:

• After exceeding 100 million MAUs at the end of 2020, MAU penetration reached 20.0% compared to 5.5% in the first quarter of 2020.
• Significantly enriched long-form audio content offering with the number of licensed titles more than quadrupled year-over-year.
• Accelerated the addition of PUGC and UGC long-form audio content. QQ Music launched the Ground Zero Podcast program, which offers financial resources and tools that enable original podcast content creation.
• In March 2021, it completed the acquisition of Lazy Audio and started consolidation. It also integrated Kuwo Changting with Lazy Audio to form Lanren Changting in April, a new brand for Tencent Music’s long-form audio business
• It recently started its foray into ad-based monetization giving users easy access to a vast amount of high-quality audio content.

China online entertainment market overview 2021

Financial Highlights

Total revenues were RMB7.82 billion (US$1.19 billion), representing an increase of 24.0% year-over-year.

• Online music services revenues grew by 34.5% year-over-year.
• Revenues from music subscriptions were RMB1.69 billion (US$258 million), representing 40.2% year-over-year growth.
• Revenues from advertising services recorded over 100% year-over-year growth.

Net profit was RMB979 million (US$149 million) and net profit attributable to equity holders was RMB926 million (US$141 million). Non-IFRS net profit was RMB1.24 billion (US$188 million) and Non-IFRS net profit attributable to equity holders was RMB1.18 billion (US$180 million).

Centered around the theme of the ‘Spirit of Nature’, this collaboration draws upon Burberry’s longstanding exploration of the relationship between humans and nature.

The fashion house’s affinity to the outdoors links harmoniously with Honor of King’s character Yao, who embodies the spirit of nature and is able to take the form of a deer – also an expression of the Burberry animal kingdom house code.

In keeping with the fashion house’s signature gabardine, pioneered by founder Thomas Burberry and designed to protect its wearer against the elements, Yao plays the role of a protector for her fellow gamers within Honor of Kings.

Yao’s two exclusive skins have been inspired by Burberry house codes as reinterpreted by Riccardo. Seamlessly blending the physical and digital worlds, Yao’s ‘Spirit of Nature’ new skin draws upon Burberry’s rich heritage and includes references to the iconic House check, the trench coat, and the Thomas Burberry Monogram.

Burberry launched its first luxury social retail store, empowered by WeChat

This skin draws upon the classicism of these Burberry hallmarks and reinvents them into a modern look for Yao to reflect her strong, dynamic and adventurous character.

Yao’s ‘Spirit of Nature’ deer takes a mirrored form, drawing upon Riccardo’s fascination with the concept of duality and the creativity found in two perspectives.

In Honor of King’s first collaboration with a brand on its ‘Legend’ skin offering, Burberry has co-created a ‘Spirit of the Forest and Ocean’ Legend skin for Yao using one of the runway looks from the house’s Spring/Summer 2021 collection ‘In Bloom’ – a collection inspired by thoughts of regeneration, dynamic youth and reconnecting with nature.

Yao’s look draws upon the collection’s mythical marine references and features a statement warm royal blue collarless trench coat and a crystal-embroidered vest. Mirroring the essence of the look, the ‘Spirit of the Forest and Ocean’ Legend deer pulsates blue light through its crystal body.

Building upon the existing partnership between the luxury fashion house and Tencent, this collaboration continues to reflect Burberry’s ambitions to push boundaries through innovation and creativity, enabling the Burberry community to explore the digital realm of Honor of Kings in an exciting new concept.

The exclusive Burberry skins will be available to purchase for all Honor of Kings players in mainland China. The skins will then remain part of the players’ permanent collection.

China luxury consumer behavior study 2020

Zhihu is also recognized as the most trustworthy online content community and widely regarded as offering the highest-quality content in China, according to the CIC Survey.

It prides itself as a “marketplace of answers,” steadily accumulating trustworthy content through continuous creation and engagement among users and content creators over a journey of more than ten years.

As of December 31, 2020, Zhihu had 43.1 million cumulative content creators, who had contributed 315.3 million questions and answers. Its 75.7 million average MAUs in the fourth quarter of 2020 generated 675.7 million average monthly interactions during the same period.

Though it’s launched for 10 years but it is still in an early stage of monetization. Its average MAUs increased from 48.0 million in 2019 to 68.5 million in 2020.

It has adopted a content-centric monetization model and currently generates revenue from online advertising (62.4% of total revenues in 2020), paid membership (23.7%), content-commerce solutions (10%), and other new services (3.9%; primarily online education and e-commerce services).

Zhihu primarily charges display-based advertisements by cost-per-day (“CPD”) model and cost-per-mille (“CPM”) model, and primarily charge performance-based advertisements by cost-by-click (“CPC”) model.

Zhihu’s revenue increased from RMB670.5 million in 2019 to RMB1.4 billion (US$207.2 million) in 2020. Its net loss decreased from RMB1.0 billion in 2019 to RMB517.6 million (US$79.3 million) in 2020.

Its average MAUs increased by 42.7% from 48.0 million in 2019 to 68.5 million in 2020.

The level of user engagement in our community is also increasing, according to Zhihu IPO prospectus. The number of its average monthly social interactions in 2020 increased by 42.0% compared to that in 2019, and the daily active users opened the Zhihu app an average of 6.2 times per day in the fourth quarter of 2020.

Its average monthly paying members increased significantly from 0.6 million in 2019 to 2.4 million in 2020, and our paying ratio increased from 1.2% to 3.4%. In addition, the growth of its user base and user engagement has attracted more merchants and brands to our community and increased their spending to pursue more effective branding and advertising.

In addition to online advertising and paid membership services, Zhihu formally launched content-commerce solutions in early 2020. It has also consistently explored additional content-centric monetization channels and added new revenue streams.

For example, in furtherance of its development of education vertical, Zhihu has launched an online education service in response to the high demand for educational resources of its users. It has added e-commerce service as part of its efforts to expand the vertical service coverage in response to the significant consumption of trustworthy content on product recommendation and evaluation in the community.

43.1% of Zhihu users are female as of December 2020. They also have a wide geographical coverage with 52.6% of users in tier 1 and new tier 1 and 21.2% of MAUs in tier 2 cities in China as of December 2020.

In addition, 78.7% of Zhihu’s MAUs were under 30 years old in December 2020.

Users can leverage a series of features to engage actively within the community. Users can upvote and downvote answers and comments, which serve an instrumental role in our community interactions.

Users can also identify and invite other users to answer any question in the community. Other social interaction features include comments, private messages, likes, follows, favorites, and sharing.

Fake fans and manipulations on China social media

Zhihu Content Operations

Zhihu uses an AI-powered question routing system to invite users to answer questions that correspond to their interests and expertise, to incite their desire to create.

It also offers productivity tools to help content creators efficiently produce quality content. It uses a feed recommendation system and a search system to distribute content of interest to users.

Users can browse their personalized home feeds on the Zhihu app and website based on their profiles and prior behaviors, as well as search keywords to quickly access relevant content.

In addition, users can see updates from content creators and topics that they have followed, read trending topics, watch videos, and browse channels to discover content.

Zhihu leverages TopicRank algorithms to assess the content based on analytical results of users’ credentials and engagement. As a result, users’ behavior ultimately determines the order by which content is presented.

Influential, reputable, and well-recognized users generally have more weight in the content assessment process. It uses big data analytics to study user interactions and other factors to refine its assessment of the appropriateness of any particular content and determine corresponding reactions.

To respond to inappropriate content, it uses AI-powered proprietary systems, such as WaLi, content-monitoring system, and WuKong, anti-spamming system.

eBook: Win Chinese Market with Content

Zhihu Founder

Its founder, chairman, and chief executive officer, Zhou Yuan, born in 1980 in Guizhou, is an entrepreneur with over 15 years of experience in the internet and media industries.

Its shareholders include Tencent, Kuaishou, and Baidu.

As of December 31, 2020, Zhihu had 1,651 full-time employees, all of whom were based in China, primarily at our headquarters in Beijing, China.

China’s online content communities

The market size of China’s online content communities in terms of revenue increased from RMB38.6 billion in 2015 to RMB275.8 billion in 2019, and is expected to increase to RMB1.3 trillion in 2025, representing a CAGR of 30.3% from 2019, outgrowing the overall online content market.

Online content community user base in China has expanded significantly from 516.2 million in 2015 to 773.0 million in 2019, and is expected to further increase to 1.0 billion in 2025.

China’s online content community market is still at early stage of monetization with significant growth potential.

Revenue per user of China’s online content communities, calculated as total revenue of online content community market divided by total number of users, was RMB356.7 in 2019, growing fivefold since 2015, but only about one-third of that of the U.S. market in 2019, which was RMB1,024.3.

In 2025, this value in the China market is expected to further increase to RMB1,292.4, which is still lower than the RMB1,858.6 expected for the U.S. market, showing significant potential for monetization.

Compared with the U.S. market, where monetization is primarily through advertising, China’s online content community market features more diversified monetization channels, including online advertising, paid membership, content-commerce solutions, content e-commerce, virtual gifting in live streaming, online games, IP-based monetization, and online education.

China’s online content communities can be further categorized into comprehensive online content communities and vertical online content communities.

Comprehensive online content communities refer to content communities covering news, entertainment content, experience sharing, professional expertise, and knowledge, among others.

Vertical online content communities refer to communities that provide content in certain content verticals, such as cosmetics and games, among others.

According to CIC, the market size of comprehensive online content communities in China in terms of revenue has expanded rapidly from RMB3.2 billion in 2015 to RMB121.2 billion in 2019, and is expected to reach RMB943.5 billion in 2025, representing a CAGR of 40.8% from 2019, higher than that of the overall online content community market in China.

The trend suggests that Chinese users tend to favor one-stop destinations for a comprehensive set of content offerings, as oppose to vertical online communities.

The diversity of content verticals of comprehensive online content communities enables them to satisfy the diverse needs of a broad user base. Users are able to utilize one app for different scenarios to optimize their experience, which enhances user stickiness.

Among online content formats, text and image are usually the origination and foundation of content creation, providing comprehensive content coverage and flexible content consumption scenarios, whereas video has become an increasingly popular form of content creation and consumption.

In terms of content products, Q&A form by nature invites a high level of user interaction and inspires sharing of knowledge, experience, and insights. Platforms with multiple content forms can cater to diverse user needs, and therefore have better receptivity among users and higher monetization potential.

The number of paying users in China’s online content communities, or users who pay for any type of products or services such as membership, education, and virtual gifts in online content communities at least once during a year, is expected to increase at a CAGR of 17.1% between 2019 and 2025, which means an increase of 360.4 million extra paying users of online content communities to 588.2 million in 2025.

Over 80% of surveyed users are willing to pay more for high-quality online content in the future, according to the CIC Survey.

According to CIC, China’s paid membership market size in terms of revenue reached RMB105.0 billion in 2019 and is expected to grow to RMB328.3 billion in 2025, among which the revenue generated from online content communities is expected to increase from RMB17.4 billion in 2019 to RMB90.2 billion in 2025.

Within China’s paid membership market, online content communities are expected to outgrow other online content market players due to the higher potential of membership penetration and lower content cost to ramp up paid membership.

KFC & Ting Hsin’s attempts in membership e-commerce in China

Kuaishou started to lead the short video market by reaching over 200 million MAU in November 2017.

Tik Top, part of Toutiao, saw astonishing growth in MAU from September 2017. In February 2018, Kuaishou continued to dominate this market with DAU of exceeding 100 million, followed by Tik Tok.

Read our online entertainment market briefing to understand the latest about short video segment, Douyin, and Kuaishou.

Top traffic driver compared: TikTok/Douyin vs. Kuaishou vs. Bilibili vs. RED

The majority of China’s short-video users (over 70%) is between 18 and 35 years-old and more are located in tier-3 and tier-4 cities than the top tier cities.

The DAU/MAU ratio of Kuaishou and Tik Tok both reached 0.45, which means each user equally launch Kuaishou/Tik Tok app almost every other day.

15 seconds short video is Tik Tok’s main product, which meets users’ need for fragmentation of the network transmission. Tik Tok users have a longer duration of the engagement. Around 30 million users opened Tik Tok at 9:00 and don’t turn it off until 23:00 at late night. It seems that only after they fell asleep did they stopped watching short videos.

In particular, after a meal and before sleep are peak periods for browsing Kuaishou and Tik Tok.

In February 2018, Tik Tok users aged 24-35 accounted for 46.71% of the total users on Tik Tok. Compared with users aged under 24 who were the majority in July 2017, they have higher income and consumption power. Moreover, users live in super tier 1 and tier 1 cities accounted for 63.87% of the total. Hence, it becomes easier for Tik Tok to achieve traffic monetization.

Female young users aged under 24 represent the majority of Kuaishou/Tik Tok users. Kuaishou had higher penetration rate than Tik Tok in fourth-tier cities or below while Tik Tok performed better in first and second tier cities than Kuaishou.

The number of users with a bachelor degree or above of Tik Tok was 10% more than that of Kuaishou. However, the income levels of the two short-video mobile apps were almost the same.

The most attractive elements of Kuaishou lie in its interesting and down-to-earth, versus fun, cool, and young elements of Tik Tok.

57% users of both apps follow interesting ordinary people; and, 53.3% users follow the talented. Currently, both Kuaishou and Tik Tok tend to offer more support and exposure to the interesting ordinary people.

After seeing other users’ interesting videos, 77.8% of Tik Tok users would try to imitate the video by themselves compared with 50.9% Kuaishou users. The motivation of recording life on short video drives 59% Tik Tok users and 49.1% Kuaishou users to post a video.

For users who had used both Kuaishou and Tik Tok, 15% of them uninstalled both of them. For users who have used both apps but eventually keep at least one of them, 4.4% of them choose Kuaishou while 31.5% of them choose Tik Tok.

Both Kuaishou and Tik Tok saw higher user churn rate in female users than male ones, higher in the second- and fourth-tier cities or below than the first- and third-tier cities. Kuaishou loses most users in the second-tier cities compared with Tik Tok in fourth-tier cities or below.

Compared with Tik Tok, users are more likely to leave Kuaishou for boring content or application design not hitting the spot.

Users spend more time on Tik Tok.

Chinese influencer platforms: Weibo, Douyin, Kuaishou, Xiaohongshu

The average mobile MAUs of short video app Likee increased by 86.2% to 150.3 million from 80.7 million in the corresponding period of 2019.

The average mobile MAUs of global live streaming services increased by 20.4% to 102.3 million from 85.0 million in Q2 2019, among that:

• 41.2 million were from YY, which increased by 6.0% year over year;
• 61.1 million were from outside of China
  • 29.4 million from Bigo Live, which increased by 41.3% year over year
  • 31.7 million from HAGO, which increased by 25.3% year over year.

The average mobile MAUs of video communication service was 204.4 million. The total number of paying users of YY decreased by 2.2% to 4.1 million from 4.2 million in the corresponding period of 2019, primarily due to the impact of COVID-19.

During the quarter, Bigo Live’s mobile MAUs and paying users achieved very impressive growth, and live streaming revenues of Bigo segment contributed more than half of Joyy’s total live streaming revenues for the first time ever.

On the short-form video front, Joyy also focused on cultivating Likee’s global ecosystem by diversifying its content offerings, refining its product features, and tailoring its expansion initiatives to different regions.

Likee’s total MAUs increased by 86.2% year over year to 150.3 million in Q2 2020.

Financial Highlights

Net revenues increased by 36.3% to RMB5,840.1 million (US$826.6 million) from RMB4,284.8 million in the corresponding period of 2019.

Net income from continuing operations attributable to controlling interest of JOYY Inc.2 was RMB619.4 million (US$87.7 million), compared to net loss RMB6.1 million in the corresponding period of 2019, primarily due to the impact of income from fair value change in investment.

Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY Inc increased by 38.3% to RMB493.6 million (US$69.9 million) from RMB357.0 million in the corresponding period of 2019, primarily due to the decrease in the operating loss of Bigo Inc (“Bigo”).

US President Donald Trump issued an executive order last week prohibiting US companies from any transaction that is related to WeChat.

Chinese consumers believe that without WeChat, the iPhone will become “expensive e-waste”. Following Trump’s executive order last week, iPhone fans across China are now rethinking their dependence on the iPhone.

More than 1.2 million users on China’s leading social platform Weibo have responded in the poll conducted by Sina Technology, a news media in China, asking users to choose between replacing the smartphone and uninstalling WeChat if WeChat can no longer be used on iPhone.

About 95% of the participants said they would rather change their smartphones than uninstallingWeChat. Trump’s ban will force many Chinese users to switch from iPhones to other brands because WeChat is so important to Chinese users.

With more than 1.2 billion monthly active users, WeChat is one of the most important applications in China. If WeChat is no longer supported, the iPhone will become useless for most Chinese users.

The scope of application of the Trump’s order is unclear. The most important thing is whether it will apply only to the U.S. territory or to the global business transactions of U.S. companies. If it is the latter, Chinese consumers will no longer buy iPhones in the future, resulting in Apple losing 30% of its global sales.

Apple has also warned the White House that Trump’s order will put the company at great risk. Disney, Ford, Intel, Morgan Stanley, UPS and Wal Mart have also informed the White House that U.S. companies may face serious consequences.

WeChat statistical highlights 2020

The total paying users of Momo’s live video service and value-added service, without double counting the overlap and including 4.2 million paying users of another app it acquired earlier Tantan, were 12.8 million for the first quarter of 2020, compared to 14.0 million for Q1 2019, which included 5.0 million paying users of Tantan.

Momo Financial Results in Q1 2020

Total net revenues were RMB3,594.1 million (US$507.6 million) in Q1 2020, a decrease of 3.5% from RMB3,722.9 million in Q1 2019.

Live video service revenues were RMB2,332.0 million (US$329.3 million) in Q1 2020, a decrease of 13% from RMB2,689.4 million during the same period of 2019, as a result of the impact of COVID-19 adversely affecting the sentiment of its paying users, especially among the top of the pyramid paying users.

Total value-added service revenues, mainly including virtual gift revenues and membership subscription revenues, were RMB1,175.8 million (US$166.0 million) in Q1 2020, an increase of 30% from RMB903.8 million in Q1 2019.

The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by more functions launched and more paying scenarios introduced to enhance the social experience of Momo users, and to a lesser extent, the increase in the membership subscription revenues of Tantan.

Mobile marketing revenues were RMB57.2 million (US$8.1 million) in Q1 2020, a decrease of 29% from RMB80.7 million during the same period of 2019. The decrease in mobile marketing revenues was primarily caused by the decreased demand from its advertising and marketing customers as well as its strategy to underweight the line in terms of resource allocation.

Mobile games revenues were RMB12.7 million (US$1.8 million) in Q1 2020, a decrease of 67% from RMB39.0 million in Q1 2019. The decrease in mobile game revenues was mainly due to the continued decrease in quarterly paying users of mobile games.

Net revenues from Momo segment decreased from RMB3,419.2 million in Q1 2019 to RMB3,202.1 million (US$452.2 million) in Q1 2020, primarily driven by the decrease in net revenues from live video service, partially offset by the increase in net revenues from value-added service.

Net revenues from Tantan segment increased from RMB295.3 million in Q1 2019 to RMB381.7 million (US$53.9 million) in Q1 2020, which was mainly due to the increase in the average revenues per paying user resulting from more features launched.

Cost and expenses

Cost and expenses were RMB3,026.1 million (US$427.4 million) in Q1 2020, a decrease of 10% from RMB3,349.4 million in Q1 2019.

The decrease was primarily attributable to:

• a decrease in share-based compensation expenses due to the related expense from the options granted to Tantan’s founders amount of RMB466.9 million as the related share options vested in Q1 2019 when the necessary performance conditions were satisfied;
• a decrease in revenue sharing with broadcasters related to its live video service. The decrease was partially offset by an increase in marketing and promotional expenses to attract users on Momo and Tantan.

Non-GAAP cost and expenses (note 1) were RMB2,819.2 million (US$398.1 million) in Q1 2020, an increase of 4% from RMB2,719.2 million during the same period of 2019.

Income from operations

Income from operations was RMB594.1 million (US$83.9 million) in Q1 2020, compared to RMB384.4 million during the same period of 2019.

Income from operations of Momo segment was RMB770.3 million (US$108.8 million) in Q1 2020, decreasing from RMB998.6 million in Q1 2019. Loss from operations of Tantan segment was RMB171.9 million (US$24.3 million) in Q1 2020, compared to loss from operations of RMB604.6 million in Q1 2019.

Non-GAAP income from operations (note 1) was RMB801.0 million (US$113.1 million) in Q1 2020, compared to RMB1,014.7 million during the same period of 2019.

Non-GAAP income from operations of Momo segment was RMB903.1 million (US$127.5 million) in Q1 2020, decreasing from RMB1,098.9 million in Q1 2019. Non-GAAP loss from operations of Tantan segment was RMB100.4 million (US$14.2 million) in Q1 2020, compared to non-GAAP loss from operations of RMB77.1 million in Q1 2019.

Income tax expenses

Income tax expenses were RMB162.9 million (US$23.0 million) in Q1 2020, decreasing from RMB163.7 million in Q1 2019.

Net income

Net income was RMB537.7 million (US$75.9 million) in Q1 2020, compared to RMB286.6 million during the same period of 2019.

Net income from Momo segment was RMB707.1 million (US$99.9 million) in Q1 2020, decreasing from RMB893.9 million in Q1 2019. Net loss from Tantan segment was RMB165.1 million (US$23.3 million) in Q1 2020, compared to a net loss of RMB597.7 million in Q1 2019.

Non-GAAP net income (note 1) was RMB735.1 million (US$103.8 million) in Q1 2020, compared to RMB907.5 million during the same period of 2019.

Non-GAAP net income from Momo segment was RMB839.9 million (US$118.6 million) in Q1 2020, decreasing from RMB994.2 million in Q1 2019. Non-GAAP net loss of Tantan segment was RMB103.2 million (US$14.6 million) in Q1 2020, compared to non-GAAP net loss of RMB79.6 million in Q1 2019.

Net income attributable to Momo Inc. was RMB538.9 million (US$76.1 million) in Q1 2020, compared to RMB289.3 million during the same period of 2019.

Non-GAAP net income (note 1) attributable to Momo Inc. was RMB736.3 million (US$104.0 million) in Q1 2020, compared to RMB910.3 million during the same period of 2019.

Diluted net income per ADS was RMB2.46 (US$0.35) in Q1 2020, compared to RMB1.36 in Q1 2019. Non-GAAP diluted net income per ADS (note 1) was RMB3.34 (US$0.47) in Q1 2020, compared to RMB4.15 in Q1 2019.

Cash and cash flow

As of March 31, 2020, Momo’s cash, cash equivalents and short-term deposits totaled RMB15,467.2 million (US$2,184.4 million), compared to RMB14,925.3 million as of December 31, 2019. Net cash provided by operating activities in Q1 2020 was RMB543.5 million (US$76.8 million), compared to RMB1,175.9 million in Q1 2019.

For the second quarter of 2020, Momo expects total net revenues to be between RMB3.8 billion to RMB3.9 billion, representing a decrease of 8.5% to 6.1% year over year.

The net income attributable to HUYA Inc. was RMB171.2 million (US$24.2 million) for Q1 2020, representing an increase of 169.8% YoY from RMB63.5 million.

Non-GAAP net income attributable to Huya was RMB263.4 million (US$37.2 million) for Q1 2020, representing an increase of 100.7% YoY from RMB131.3 million.

The average mobile MAUs of Huya Live in the first quarter of 2020 reached 74.7 million, an increase of 38.6% YoY from 53.9 million. The average MAUs of Huya Live reached 151.3 million, an increase of 22.2% YoY.

The total number of paying users of Huya Live in Q1 2020 reached 6.1 million, an increase of 13.0% YoY from 5.4 million.

Since Tencent became its largest shareholder in April 2020, they have been strengthening their collaboration, especially in live streaming content and capabilities.

Huya Financial Results in Q1 2020

Total net revenues for the first quarter of 2020 increased by 47.8% to RMB2,411.9 million (US$340.6 million), from RMB1,631.5 million for the same period of 2019.

Live streaming revenues increased by 46.5% to RMB2,274.5 million (US$321.2 million) for the first quarter of 2020, from RMB1,552.5 million for the same period of 2019, primarily due to the increase in average spending per paying user and the number of paying users on Huya Live.

The increase in average spending per paying user was primarily driven by the enhancement of content attractiveness and the improvement in user experience. The increase in the number of paying users was primarily driven by the Company’s user growth.

Advertising and other revenues increased by 74.0% to RMB137.5 million (US$19.4 million) for the first quarter of 2020, from RMB79.0 million for the same period of 2019, primarily driven by the rising demand from an increasing number of advertisers, the advertising distribution platform launched by the Company in the third quarter of 2019 and strengthened recognition of Huya’s brand name in China’s online advertising market.

Cost of revenues increased by 42.6% to RMB1,937.1 million (US$273.6 million) for the first quarter of 2020 from RMB1,358.1 million for the same period of 2019, primarily attributable to the increase in revenue-sharing fees and content costs, bandwidth costs and personnel-related costs.

Revenue sharing fees and content costs increased by 37.7% to RMB1,532.6 million (US$216.4 million) for the first quarter of 2020 from RMB1,113.1 million for the same period of 2019, primarily due to the increase in virtual item revenue sharing fees in relation to higher live streaming revenues, and continued spending in content creators and e-sports content in both domestic and overseas markets.

The year-over-year increase was partially offset by benefits from economies of scale.

Bandwidth costs increased by 42.1% to RMB240.1 million (US$33.9 million) for the first quarter of 2020 from RMB169.0 million for the same period of 2019, primarily due to an increase in bandwidth usage as a result of the Company’s larger user base and enhanced live streaming video quality, partially offset by improved efficiency in bandwidth utilization through continued technology enhancement efforts.

Gross profit increased by 73.7% to RMB474.8 million (US$67.1 million) for the first quarter of 2020 from RMB273.4 million for the same period of 2019. The gross margin increased to 19.7% for the first quarter of 2020 from 16.8% for the same period of 2019.

Research and development expenses increased by 73.3% to RMB156.1 million (US$22.0million) for the first quarter of 2020 from RMB90.0 million for the same period of 2019, mainly attributable to increased personnel-related expenses.

Sales and marketing expenses increased by 36.3% to RMB106.5 million (US$15.0 million) for the first quarter of 2020 from RMB78.2 million for the same period of 2019. The increase was primarily attributable to the increased marketing expenses associated with the promotions for the Company’s products and brand name in both domestic and overseas markets, as well as increased personnel-related expenses.

General and administrative expenses increased by 5.1% to RMB90.2 million (US$12.7 million) for the first quarter of 2020 from RMB85.8 million for the same period of 2019, mainly due to the increased personnel-related expenses.

Operating income increased by 372.5% to RMB133.3 million (US$18.8 million) for the first quarter of 2020 from RMB28.2 million for the same period of 2019. The operating margin increased to 5.5% for the first quarter of 2020 from 1.7% for the same period of 2019.

Non-GAAP operating income, which excludes share-based compensation expenses, increased by 136.5% to RMB227.2 million (US$32.1 million) for the first quarter of 2020 from RMB96.0 million for the same period of 2019. Non-GAAP operating margin increased to 9.4% for the first quarter of 2020 from 5.9% for the same period of 2019.

Income tax expenses increased by 98.0% to RMB37.6 million (US$5.3 million) for the first quarter of 2020 from RMB19.0 million for the same period of 2019.

Net income attributable to HUYA Inc. for the first quarter of 2020 increased by 169.8% to RMB171.2 million (US$24.2 million), from RMB63.5 million for the same period of 2019.

Non-GAAP net income attributable to HUYA Inc. for the first quarter of 2020, which excludes share-based compensation expenses, gain on fair value change of investments, and income tax effects on non-GAAP adjustments, increased by 100.7% to RMB263.4 million (US$37.2 million), from RMB131.3 million for the same period of 2019.

Diluted net income per American depositary share (“ADS”) was RMB0.73 (US$0.10) for the first quarter of 2020, compared with RMB0.29 for the same period of 2019. Each ADS represents one Class A ordinary share of the Company.

Non-GAAP diluted net income per ADS was RMB1.12 (US$0.16) for the first quarter of 2020, compared with RMB0.59 for the same period of 2019.

As of March 31, 2020, the Company had cash and cash equivalents, short-term deposits and short-term investments of RMB10,316.7 million (US$1,457.0 million), compared with RMB6,329.1 million as of March 31, 2019.

Net cash provided by operating activities decreased to RMB135.1 million (US$19.1 million) for the first quarter of 2020, from RMB501.7 million for the same period of 2019. The decrease was primarily attributable to the increase of annual cash bonuses paid to its employees, the increase of fees paid to broadcasters and the increase of licensing fees paid for broadcasting e-sports tournaments.

For the second quarter of 2020, Huya currently expects total net revenues to be in the range of RMB2,600 million to RMB2,630 million, representing a year-over-year growth of between 29.3% and 30.8%.

Weibo’s average daily active users were 241 million in March 2020, a net addition of approximately 38 million users on year over year basis. WeChat MAU up 8% to 1.2 billion.

Weibo Financial Results in Q1 2020

For Q1 2020, Weibo’s total net revenues were $323.4 million, a decrease of 19% compared to $399.2 million for Q1 2019.

• Advertising and marketing revenues for Q1 2020 were $275.4 million, a decrease of 19% compared to $341.1 million for Q1 2019.
  • Advertising and marketing revenues from key accounts (“KAs”) and small & medium-sized enterprises (“SMEs”) were $247.9 million, a decrease of 24% compared to $324.5 million for Q1 2019.
• VAS revenues for Q1 2020 were $48.0 million, a decrease of 17% year-over-year compared to $58.0 million for Q1 2019, primarily due to the decrease of revenues from live streaming business and was partially offset by the increase of membership revenues

Costs and expenses for Q1 2020 totaled $265.4 million, compared to $276.1 million for Q1 2019. Non-GAAP costs and expenses were $249.3 million, compared to $262.4 million for Q1 2019.

Income from operations for Q1 2020 was $58.0 million, compared to $123.1 million for Q1 2019. Non-GAAP income from operations was $74.1 million, compared to $136.8 million for Q1 2019.

Non-operating income for Q1 2020 was $10.0 million, compared to $48.6 million for Q1 2019. Non-operating income for Q1 2020 mainly included

• a $12.9 million net interest and other income;
• a $2.9 million net loss on the sale of investments and fair value changes on investments, which is excluded under non-GAAP measures.

Income tax expenses were $15.9 million, compared to $21.1 million for Q1 2019. The decrease was primarily resulted from reduced earnings and was partially offset by the estimated increase of effective tax rate for China operations primarily due to the expiration of the preferential tax treatment of one of the Weibo’s PRC subsidiaries in 2020.

Net income attributable to Weibo for Q1 2020 was $52.1 million, compared to $150.4 million for Q1 2019. Diluted net income per share attributable to Weibo for Q1 2020 was $0.23, compared to $0.66 for Q1 2019.

Non-GAAP net income attributable to Weibo for Q1 2020 was $67.4 million, compared to $128.5 million for Q1 2019. Non-GAAP diluted net income per share attributable to Weibo for Q1 2020 was $0.30, compared to $0.56 for Q1 2019.

As of March 31, 2020, Weibo’s cash, cash equivalents, and short-term investments totaled $2.35 billion. for Q1 2020, cash provided by operating activities was $63.6 million, capital expenditures totaled $7.3 million, and depreciation and amortization expenses amounted to $6.8 million.

For the second quarter of 2020, Weibo estimates its net revenues to decrease by 7% to 12% year-over-year on a constant currency basis. This forecast reflects Weibo’s current and preliminary view, which is subject to change.

Xiaohongshu community trends 2020