Lessons from Momo’s overseas market promotion!

On August 27, Momo released its second quarter 2019 financial report. Its revenue and net profit both exceeded market expectations, achieving its 18th consecutive quarter of profitability. However, apart from the impressive financial data, the hidden danger of slowing user growth still exists. In June 2019, the number of monthly active users of Momo's main app was 113.5 million, an increase of less than 5% compared with 108 million in the same period last year. How to break through the growth bottleneck has become a question that Momo has to answer.

"Going overseas" may become one of the paths to break through growth. During the earnings call that day, Tantan CEO Wang Yu said that Tantan's profitability timetable depends on the speed of overseas business expansion; Tang Yan also said that he saw many new growth opportunities both in China and overseas. It is not difficult to see that the overseas market has become a growth area that Momo has high hopes for.

If we link "Momo" with "going overseas", we will inevitably think of a product called "overseas version of Momo" - MICO. This product is very similar to Momo's model. It has focused on overseas markets since its launch in 2014 and has now established a foothold in Southeast Asia, the Middle East, India and other regions. Can Momo achieve accelerated growth in overseas markets as it wishes? Perhaps we can get some inspiration from MICO’s five-year overseas journey.

Revelation 1: Overseas dividends are fading, but there is still room for growth

In 2014, the overseas mobile Internet market had huge dividends, especially in the field of stranger social networking, where there were many blank areas. As a startup company, MICO accumulated 60 million users in the two years since it went overseas, which shows how low the cost of acquiring customers was at that time. (Of course, this also reflects the huge demand for stranger social products in the overseas market.)

In the following years, more and more products joined the overseas market, and the dividends of the overseas market began to gradually fade. Especially since 2018, pan-entertainment products such as Tik Tok and Kuaishou have begun to accelerate their globalization process, the competition for content going overseas has become more intense, and the cost of acquiring customers has further increased.

But it is undeniable that compared to the domestic market where the dividends have peaked, the overseas social entertainment market still has considerable room for growth. This depends on the huge overall scale overseas, the relatively young population structure, and the differences in development levels among various regions.

Take India as an example. The size and vitality of this single market are sufficient to support the growth of many products.

India is one of the fastest growing Internet markets in the world in the past two years and has a large population. In 2018, India's population exceeded 1.34 billion, second only to China. In addition, unlike the aging population structure in China, the average age of India's population is only 28 years old. This means that India is a huge, young and vibrant dating market.

Santi, General Manager of MICO India, once described it this way: “In big cities like Delhi and Mumbai, you can see a scene similar to that in China, that is, a large number of energetic young people who have a strong desire to release themselves, express themselves and communicate with others on new social media.”

MICO is currently one of the leading social products in India, but in fact it entered India relatively late. MICO's early overseas destinations were concentrated in Southeast Asia and the Middle East, and it was only in the second half of 2018 that it began to deeply expand into the Indian market. (The definition of "deep expansion" in a market here means establishing a localized team there.)

Although there is no public data showing the current scale of MICO's users in India, it announced at the beginning of this year that it had achieved profitability in the Indian market.

Momo has also tasted some sweetness. In July last year, Tantan was officially launched in India. According to media reports, Tantan once ranked among the top five in terms of combined monthly active users on iOS and Android phones in India. In May this year, Tantan said that its user base in India doubled every three months and hoped to replace Tinder's dominant position in India.

Tang Yan said in a conference call: "Preliminary estimates show that the market size of open social networking in China and Asia is around 600 million." Tantan's deep involvement in the Indian market may provide some basis for Tang Yan's "prediction."

In addition to the huge base, development differences between regions also determine the existence of overseas growth. A reality that cannot be ignored is that the global "traffic sinking" has just begun. Emerging markets such as the Middle East, Africa, and Latin America also have a large number of young people with a strong desire for socializing.

Although the early MICOs that went overseas have already occupied their respective territories, and TikTok, which has recently launched an aggressive business, is also coming on strong, the overseas market is big enough, and Momo is by no means without a chance.

Revelation 2: Social products use pan-entertainment to make money, and this also works overseas

Judging from the financial report just released, the live broadcast business contributed more than 70% of Momo’s revenue. Despite the rapid growth in revenue from subscriptions and value-added services (up 169% year-on-year), live streaming is still Momo's most profitable business at present.

Momo's second quarter financial report revenue and growth rate of each business

It is no exaggeration to say that Momo achieved a comeback in its early years by relying on live streaming. In the domestic market, the addition of pan-entertainment has led to a surge in Momo’s revenue. Is this model feasible in overseas markets?

MICO gave the answer: foreign social users are also very willing to pay for pan-entertainment content.

Similar to Momo, MICO is based on dating functions such as "location-based dating" and "matching dating", and has added pan-entertainment modules such as live streaming, short videos, and games to meet users' social needs in various scenarios.

The main difference between the two is the market scope. MICO is positioned as a global open social platform. To match this, MICO provides functions such as "global roaming" and "real-time translation" to ensure barrier-free friendships around the world.

According to the locations of MICO's overseas operation centers announced by it, its main markets include Indonesia, Thailand, Egypt, India, etc. In these markets, MICO made money using the "Momo model".

MICO has been a regular on bestseller lists in its major markets. According to App Annie data, on July 31, MICO topped the Indonesian iOS social app best-selling list; from August 18 to 20, MICO continued to occupy the first place in Egypt's iOS social app best-selling list.

In addition, according to data intelligence store Sensor Tower, MICO has been on the overseas revenue list of Chinese short video/live streaming applications for two consecutive quarters in 2019, and is the only social platform on the list.

In May 2018, MICO announced that it had achieved large-scale profitability, with monthly revenue of approximately 10 million US dollars.

Although there may be direct competition in the future, from another perspective, MICO's ability to attract money may be something that Momo welcomes. At least, Momo doesn’t have to worry about its “social + entertainment” model not making money overseas.

Lesson 3: Localize, localize, localize

On the premise that both the market and the model have been proven to be feasible, what factors should be considered next?

The answer is team - a team with local genes.

People describe the era of transition from exporting tools to exporting content as moving from "shallow sea" to "deep sea". Because in the era of content going global, simple overseas placement and cross-border exchanges are far from enough. Instead, it is necessary to have sufficient understanding of the local market, form a localized team locally, and take root in the local area to carry out in-depth operations - social overseas expansion is absolutely "deep sea".

To go into the "deep sea", products need to be deeply localized in the markets where they are deployed. The basic premise of deep localization is a team with deep local genes.

This is undoubtedly the key to MICO's breakthrough overseas. It is reported that most of MICO's core team members for overseas markets are from ZTE's overseas team. They have worked or lived in one or several overseas countries for many years and have a good understanding of local market demands, cultural customs, laws and regulations, and other aspects.

MICO has announced that it has established 12 offices around the world, including 10 overseas operation centers. Each overseas operation center includes 1-2 Chinese employees as core management personnel, and also recruits a number of local employees to form a complete team with local genes.

MICO announces 12 global offices

Building such a team in multiple markets is not an easy task. WeChat started to expand overseas in 2012. Although it invested heavily, it has not been very popular overseas due to the lack of localized operations. TikTok expanded aggressively overseas last year, but due to its lack of familiarity with cultural differences and laws and regulations, it was fined in the United States and removed from stores in Indonesia, Bangladesh, and India.

This is the case for giants, and there are countless small teams that have failed due to the "pitfalls" of localization. Most of them sink silently into the "deep sea" before they enter people's field of vision.

Ultimately, without the localization gene, you won’t be able to successfully expand your social business overseas. If going overseas is inevitable, building a localized talent team will be the top priority.

summary

1. The overseas market is huge. Although we have gone through the stage of land grabbing, the growth is still there and there is still enough cake to share.

2. In overseas markets, social platforms can also make money through pan-entertainment methods such as live streaming, and they will not be out of place.

3. Social overseas expansion is a deep water area, and localized operations based on a localized team are a necessary condition.

4. Momo goes global, so stay tuned.

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3. The cost of acquiring customers through Momo information flow advertising in 7 industries including marriage, dating, and games!

4. Momo information flow advertising types and promotion effects!

5. Which industries are suitable for Momo information flow? Promote industry analysis!

6. Momo promotion: Momo product analysis report!

author: Yan Qi

Source: Yanqi