China’s Jiayuan began life back in 2003 and to a greater or lesser extent assumed the shape of established overseas online dating service Match.com. Back in 2011, when Jiayuan debuted on the Nasdaq at US$11 per share, it was China’s leading site for dating and matchmaking. However, things have steadily declined for the site since, and its stock is now worth less than half its initial listing price. Though Jiayuan saw explosive growth at the time and was a profitable company even before it went public, fortunes shifted for the company with the advent of smartphones and tablets signalling the decline of the PC. China’s younger generation changed too.
Similar to how Facebook failed to monopolize the mobile messaging space like it has done with its main site, the transition to the mobile arena for Jiayuan was slow and difficult. Jiayuan’s most profitable premium feature, the exchange of messages with other members, is now given away for free. Jiayuan’s capacity to monetize its business has eroded. More flexible and adaptable apps like Momo and newer upstart Tantan – and even the explosively popular messaging app WeChat – contributed to Jiayuan’s decline. They offer novel, free features like real-time location-based matching (Momo), Tinder-style swiping (Tantan), and even randomised matching services based on real time interaction (Wechat’s ‘Shake’ feature).
These newer apps have entirely different business models, offer most of their most coveted features for free, and have manifold tie-ins with other services. Young smartphone users country-wide are quick to point out the usefulness of features including restaurant recommendations, taxi-hailing, social gaming, and the hosting of platonic social groups.
This sea-change is reflected in the numbers. Jiayuan is still running at an operating loss of US$1.6 million with a revenue of US$27.3 million as of the first quarter 2015. More revealing are the user base figures reported by Jiayuan; monthly active users have shrunk 5 percent from last year and amount only to a relatively small 5.2 million. In contrast, Momo – after a mere four years of existence – has managed to bring revenues to US$26.3 million and easily trumps Jiayuan’s monthly active user base with a massive 78.1 million. And that Momo number is up 83 percent from the previous year.
Marriage meat market
An important key distinction that separates the Chinese market from the online dating universe of the western world is the continued importance of matrimonial service providers. There is still a substantial utility offered by marriage-oriented apps and websites in a market like China where casual relationships are less common and society is generally more conservative. The more laid-back forms of dating and hook-up apps that dominate the western industry are in some ways frowned upon by Chinese authorities, whose Ministry of Culture last year clamped down on Momo for allegedly encouraging prostitution.
Nevertheless, in a market estimated to be worth US$1.6 billion in sales by 2016, there’s room for many online players. A site called Baihe is perhaps testament to the wisdom in specialisation. Baihe recently nabbed US$241 million in an investment round to help it expand its vision of making matrimonial matchmaking more efficient. Where Jiayuan does not require the use of real-name verification, Baihe does. Baihe even goes further in requesting key criterion like car ownership, credit ratings, and even ownership of housing.
Although Momo is now China’s top dating app, it is not immune from all these changes itself. It was once chiefly considered a hook-up app, but it has now switched direction and diversified into social interaction based around common interest groups, events, and other location-based phenomena. All of Momo’s adverts show young hipsters hanging out and having fun – there’s no sign of holding hands or staring at wedding rings.
It now appears from all the changes and the blending of forms in China’s online dating landscape that startups and their apps are moving toward specialisation. They’re going after more discrete categories and realizing that China’s young people need different things at different times. That likely is not only a more sustainable strategy but it may even become the future direction of the industry.
See more: 6 dating apps from Asia
Editing by Steven Millward & Paul Bischoff, top image by Thomas Hawk
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