Online social platform Momo [MOMO:US] released its unaudited 1Q21 financial results, reporting that its revenue reached RMB3.47bn, down 3.4 YoY, as reported by 36kr on June 8. During the reporting period, the firm achieved a net profit of RMB461m, dropping by 14.3% YoY. On the other hand, the monthly active user (MAU) of Momo increased by 6.75% YoY to 115m in 1Q21. According to the financial report, Momo’s main business, the live-streaming segment, contributed RMB1.96bn to the total earnings, down from RMB2.33bn in the same period last year. The company unveiled that the shrinking income from the live streaming business is mainly due to a structural change in this business.
Momo used to provide a platform for strangers to make friends online. However, the industry insiders disclosed that these users would switch to WeChat or other social platforms as they become familiar with each other. Therefore, this situation makes Momo unable to gain users steadily. In 2016, the social platform finished its business transformation to a live-streaming service provider. The revenue generated from the live-streaming sector mainly consists of value-added services, including virtual gift and membership subscriptions. The income from the above services hit RMB1.456bn in 1Q21, rising 23.8% YoY., and the revenue generated by these services in 1Q21 reached RMB1.456bn, growing by 23.8% YoY. Notably, Momo intends to combine live-streaming with online shopping amid the emerging trend of e-commerce live-streaming in China, while the move is still at an early stage due to intensive competition domestically, according to industry insiders. Statistically, Taobao, TikTok, and Kuaishou [1024:HK] respectively occupied around 51%, 21%, and 26% of the domestic e-commerce live streaming market in 2020.