Video-streaming and mobile gaming site Bilibili said it would hold fast to its strategy of providing diversified content and videos generated by professional users to achieve its target of 400 million monthly active users.
The market for short video is big enough for all players to grow their market share, said chief executive Chen Rui at a press conference in Shanghai marking the company’s debut in Hong Kong.
Despite competition from the likes of Kuaishou and Douyin, the Chinese version of Tiktok owned by unicorn ByteDance, Chen said the target for 2023 is unlikely to be derailed.
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“Videolization is an inevitable trend, and we believe that in the next few years every internet user will become an [online] video user,” said Chen. “It’s reasonable to expect our user base to double.”
Chen initially touted the monthly active users (MAU) target during the Nasdaq-listed company’s fourth quarter earnings call in February.
As the second Chinese short-video platform to list in Hong Kong after Kuaishou, investors are watching closely how the two Chinese media giants could ultimately funnel user growth through to their bottom line. However, on Monday Chen stopped short of giving a clear timeline for when the company could turn profitable. Bilibili’s 2020 full year net loss widened to 3.1 billion yuan (US$473 million), from 1.3 billion yuan a year ago. It recorded a 13 straight quarter in the red.
Chen claimed the firm’s model of featuring videos generated by professional users is unique, and will be the key driver of user base growth over time.
This group of users has a certain level of professional production and editing capabilities, according to the Hong Kong listing prospectus. Bilibili had 202 million MAUs as of the fourth quarter of 2020.
This strategy partly explains why the Shanghai-based firm is spending half of the proceeds raised in Hong Kong on growing its content offerings and providing an “ecosystem that would cater to innovators”, said Li Ni, chief operating officer at the presser on Monday.
China’s video-based industry is forecast to grow to 1.8 trillion yuan in revenue terms by 2025 across 1.2 billion users, from 757.9 billion yuan across 930 million users in 2020, data from iResearch shows.
Senior management’s rosy growth outlook contrasted with Bilibili’s Hong Kong stock debut performance on Monday. At noon, the shares were trading at HK$790, about 2 per cent lower than the final offer price at HK$808. That bucked the upward trend of the Hang Seng Index, which rose 0.3 per cent around midday.
Chen said the Hong Kong stock’s lacklustre performance was akin to a “black swan” event for the company, coming after a week of overall poor performance of Chinese tech stocks in the US.
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