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Wen/Li Xia
Source: Bohu Finance (ID: bohuFN)
Because he saw an attractive girl in the bar and didn't know how to chat up, Tang Yan made a stranger. Today, more than ten years have passed since the appearance of Momo, but it is still brand new in the battlefield of strangers' social interaction.
Tinder, uki, Jimu, Taqu, gel, one can, flow, whether well-known or niche, still alive or dead, focusing on interests, tree holes, ancient customs, and the second dimension, this battlefield is still vibrant, but difficult to grow.
Finally, eight years after Momo landed on NASDAQ, the stranger social field is expected to welcome a significant player in the capital market. Soul, who has delivered the prospectus to the Hong Kong Stock Exchange, is valued at $2 billion.
Marketing is unrestrained and advertising is restrained
On May 11, 2021, Soul submitted a listing application to the SEC, but a month later, Soul made a temporary decision to suspend listing, saying that "because the company has other capital operation considerations, it decided to suspend the IPO process first. Its major shareholder Tencent also supports this decision."
One year later, on June 10, Soul terminated his listing plan in the United States. Twenty days later, Soul delivered the prospectus to the Hong Kong Stock Exchange. Du Xin, the founder of Nigou Capital, Soul's angel investor, said to the financial sector: "The resumption of the IPO of Soul may have something to do with the improvement of the current market."
According to the audit speed of Hong Kong Stock Exchange since this year and the practice that most newly listed companies' prospectuses will expire after six months, Soul may not be listed until next year at the earliest.
Of course, the premise is the hearing through the Hong Kong Stock Exchange.
In the three years from 2019 to 2021, Soul's revenue will be 70 million, 500 million and 1.28 billion respectively, with a very rapid growth. However, compared with the net loss of 350 million, 580 million and 1.32 billion, it is insignificant.
It is found that the majority of losses come from sales and marketing expenses, which are 200 million, 620 million and 1.51 billion respectively in the past three years, one head higher than the net loss.
Dare to output so recklessly, mainly because the front row is excellent. It is needless to say how powerful the major shareholder mentioned above is. According to the prospectus, it accounts for 49.9% of the shares of Soul. In addition, Miha Tour, a local tycoon who is crazy about making money in the world with a "Original God", also scored 5.47%.
The crazy output has also achieved some results. In the past three years, Saul's MAU has been 11.5 million, 20.8 million and 31.6 million, and DAU has been 3.3 million, 5.9 million and 9.3 million, respectively. The data in three years has more than doubled.
With traffic, we have come to the last step: a platform for strangers to socialize, how to do business closed-loop between traffic and cash? Soul told us that this is "value-added service".
Value added services, that is, virtual gifts and member ordering. It accounted for 100% of Soul's revenue in 2019 and slightly decreased to 93.9% in 2021 because of the "advertising service" and "others".
Although Soul also knows that in China's mobile social network market in 2021, advertising and value-added services will account for 49% and 44% respectively, at this stage, Soul obviously does not want to make money.
To sum up, it can be calculated that if Saul stops pursuing user growth and then reduces the spending on marketing - while other factors remain unchanged, profitability is not a problem.
The remaining problem is the common problem faced by social platforms. How to find new means of liquidity? In particular, if Soul still does not work on advertising like Station B after its listing, it will not be necessary to go public if it can see through the ceiling at a glance.
The Balance between Social and Business: Metacosmic Advertising
Last month, an anchor named Xu Guohao was fined 108 million yuan for tax evasion. Later, he was fond of hot search. His live broadcast platform is the familiar "Momo".
The social networking platform's live broadcast is just not doing its job, but it really made Momo succeed, at least from the perspective of financial statements.
In 2021, Momo's parent company Zhiwen Group achieved a revenue of 14.58 billion yuan, of which 8.38 billion yuan came from live video, accounting for 57% of the revenue. In 2016, this proportion also reached 84%. Even CEO Tang Yan exclaimed, "Live broadcast will make so much money!".
Today, the originator of strangers' social interaction has gone farther and farther on the way of live broadcasting, not only with music, dance, games, outdoor and other partitions, but also with more and more commercial cash flow at the end.
Compared with virtual gifts, Momo has already started the live delivery mode, and fans can directly purchase physical gifts from the anchor to express their support. In addition to opening his own shop, the anchor can also directly recommend the goods in Momo's selection library to earn commissions.
The latest data shows that Zhiwen Group's net profit attributable to the parent company in the first quarter of this year was 290 million yuan. If we exclude the loss caused by the goodwill and intangible asset impairment of 4.4 billion yuan in the fourth quarter of 2021, Momo has achieved profits for more than six years and 26 consecutive quarters. This is no more popular than socializing with strangers.
However, the price of success in business is that the meaning of Momo social networking is getting weaker and weaker. Live broadcast is a one-man performance. Fans give gifts in the studio, which does not have the basis of social interaction: equality.
From the existing signs, Soul's sincerity in social intercourse is much better than Momo's. At present, the most typical mode of making friends in Soul is a variety of "party halls" built based on interests. Anyone can go in and speak. The social atmosphere is very strong.
Momo, who has found business value, has abandoned some social attributes. How should Soul, who focuses on social networking, be compatible with his business value?
Soul gave his answer very early, which is the first sentence in the main body of the prospectus: we are committed to building a social metauniverse with Soul as a link with users.
Soul mentioned that he would invest in the technology of social metauniverse in the future, including XR (expanding reality, a combination of virtual and real technology), virtual space and content creation of metauniverse, and finally realize the virtualization of users and space, so that each user has a complete set of virtual assets and space.
In this social metauniverse, all Soul needs to do is sell these virtual assets and collect the fees generated during user transactions to realize revenue.
Take avatars for example. In the early days, Soul regarded itself as a young people's interest community. In order to avoid social barriers caused by appearance, it had avatars, which users could design and buy by themselves.
(Screenshot of Prospectus) In addition to avatars, users can also create their own unique party rooms, music works, and virtual pets. In order to keep pets, Soul also provides food, clothing and other virtual goods. In this way, the youth memory of the post-80s and post-90s QQ show and QQ pets came to the life of Generation Z again, and the influence of major shareholders was visible to the naked eye.
However, the most important source of revenue in the Soul Metauniverse Project is advertising.
Although the proportion of advertising revenue of Soul in the past two years is poor, it is different in the social metauniverse. Soul said that "meta universe advertising" will become a major contributor to the realization of the meta universe. In the future, we can expand the boundaries of advertising production by inserting digital billboards in the city of the universe.
It is estimated that not many people have not seen this vivid social metauniverse with tears in their eyes. When I think of someone who spent tens of millions on land purchase in the universe last year, many media are not optimistic about it. I can only say that the pattern is small.
Finally: the story of the transition period
From the past strangers and spies to the present Soul and Uki, generations of strangers' social products have hit the boredom and loneliness of urban life and taken root in places where acquaintances are absent.
However, the app has changed over and over again, and no one can grow into a giant like WeChat in the fertile soil of strangers' social interaction.
The attribute of a stranger determines that everyone can only be hot for three minutes. When needed, "Little Sweetie", and when not needed, "Mrs. Cow". So after 8090 had become rich and married, and no longer opened the street, Gen Z spent time on some younger social products such as Soul.
Now, the Internet traffic can no longer grow at a high speed. The current fertility rate also tells us that the number of new generations entering the Internet will continue to shrink in the future, which means that the cost of obtaining new traffic will continue to increase.
Momo has begun to cash in through live broadcast, and Soul also needs to weigh the relationship between traffic growth and cost benefit in the future.
However, the realization of social traffic is not easy, which requires secondary education for users. Just like the 1.2 billion month live WeChat, we first cultivate the habit of users to read public accounts, pay with WeChat, and watch video accounts, and constantly find a place of their own from Alibaba, Byte, and B stations with high traffic.
For Soul, its current users are mainly after 00, and its consumption power is insufficient. Now, in order to increase its income, Soul has begun to increase the fees for member subscription, virtual avatar, etc.
In addition, in order to improve the cash flow efficiency, Soul is also engaged in some operations, such as sending some SMS messages and notifications of "so and so have peeked at you" to arouse your curiosity. When you click in, you find that you need to recharge members to view, which constantly consumes the energy and experience of users.
Even though the social metauniverse is really an antidote, it is still a concept in its infancy. There is still a long transition period before Saul realizes to set up an advertising archway in the meta universe city, and Saul needs a more convincing story.
Reference source:
1. Financial sector: Why did Soul abandon the United States and go public in Hong Kong? Tencent and Miyou are major shareholders with monthly life exceeding 30 million yuan
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