Meitu releases its 2021 interim results, which show a total revenue of RMB806 million, with a 150.7% increase in revenue from premium subscriptions year over year2021-08-25
On August 25th, 2021, Meitu officially disclosed its 2021 interim results report. During the reported period, Meitu’s revenue increased by 44.6% year over year to RMB 806 million and its gross profit increased by 49.8% year over year to RMB 532.8 million. The adjusted net profit attributable to the owners of the company grew by 33.8% year over year to RMB 33.4 million during the period, achieving its third consecutive semi-annual adjusted net profit.
Revenue from premium subscription services and in-app purchases (hereinafter referred to as "premium subscription services") continues to see strong momentum with a significant year over year increase of 150.7%, accounting for 26.2% of the total revenue and has become the second largest revenue source for the company. The rapid growth of premium subscription services fully demonstrates Meitu's ability to successfully develop new business models and realize growth at scale.
Total revenue surged 44.6% year over year and the new business model recorded robust growth
In the first half of 2021, Meitu's total revenue was RMB 806 million, demonstrating a year over year increase of 44.6%. Revenue from premium subscription services increased significantly by 150.7% year over year to RMB 210.9 million, becoming a new business model that increases Meitu's competitive power.
Meitu’s revenue from online advertising steadily increased by 23.3% year over year to RMB 392.6 million for the first half of 2021. Meitu achieved progress in both brand and programmatic advertisement services during the period. Thanks to its efforts in seeking customers in new categories, such as e-commerce, apparel, as well as food and beverage, the number of advertisers on Meitu’s platform has continued to grow.
During the period, revenue from other categories increased significantly by 25.2% year over year to RMB 167.2 million. In particular, revenue generated from key opinion leaders (KOL), key opinion consumers (KOC), and marketing solutions (IMS) increased by 49.5% year over year to RMB 145.5 million.
During the first half of 2021, revenue from IVAS increased by 65.6% year over year to RMB 35.34 million, accounting for 4.4% of total revenue, while the number was 3.8% in the first half of 2020.
Premium subscription services maintains strong growth momentum
With the mission "to make everyone become beautiful easily," Meitu has launched premium subscription services on both its overseas apps (namely BeautyPlus and AirBrush) and domestic apps (namely the Meitu App and BeautyCam). It is worth mentioning that Meitu's premium subscription services have seen great performance since their launch and grew rapidly in the first half of 2021.
During the reported period, revenue from premium subscription services increased significantly by 150.7% year over year to RMB 210.9 million, accounting for 26.2% of the total revenue while the number was 15.1% for 2020. As of June 2021, there are about 3 million active premium subscribers on Meitu's apps, so the growth potential is huge.
The rapid growth in revenue from premium subscription services is mainly attributable to Meitu's continuous innovation of its product features, which brings users a more satisfying experience and attracts new subscribers, helping increasing the membership renewal rate. With the premium subscription services, Meitu allows users to enjoy more convenient tools, richer creative content, and more advanced image functions, so as to offer a better experience. For example, with the premium subscription, users can unlock paid features such as teeth correction, facial reshaping, and video teleprompter features; the service also regularly provides exclusive rights and effects to improve the engagement rate of paying users.
In order to better serve Meitu's large number of users and meet the needs of its premium subscription users, Meitu will continue to innovate and update its product functions, continuously improving user experience and further enhancing the business space.
Focusing on the Beauty Strategy and continuously empowering the industry
In 2021, Meitu has further deepened its Beauty Strategy. In order to realize the vision "to integrate a beautifying system to help users reach their beauty dreams", Meitu is pro-actively deploying features for the beauty industry on the basis of steady growth.
Take MeituEve as an example. With the support of unique AI technology, MeituEve's products can accurately identify skin types and accurately recommend skin care solutions, which can help brands and stores increase sales conversion rates.
MeituEve's panoramic skin analyzer has been deployed in stores in over 240 cities around the world. Many well-known brands, including Christian Dior, Shiseido, and Fawawa have reached strategic cooperation agreements with MeituEve. Meitu is actively investing resources to develop second-generation products to improve user experience and provide partners with more skin analysis solutions.
In terms of SaaS services for the beauty industry, Meidd, a company with investment from Meitu, is currently providing SaaS enterprise resource planning (ERP) services for more than 10,000 cosmetic stores in more than 250 cities in China. Meidd's SaaS ERP service platform can more efficiently promote the upstream and downstream collaboration of the beauty industry. At present, Meidd has reached cooperation agreements with some well-known domestic cosmetic brands, and will also promote cooperations with more emerging domestic brands and international brands.
In the future, Meidd will further strengthen the analysis of consumer behavior and prepare for future business growth, such as channel customization, by integrating the omni-channel resources of consumers, stores, and upstream manufacturers.
Speeding up R&D investment and building a solid "moat"
According to QuestMobile’s China Mobile Internet 2021 Semi-Annual Report, BeautyCam and the Meitu App took the No. 1 ranking in the Camera app and Photo Beautification categories, respectively, on the China Mobile Internet Value List.
Meitu's continuous focus on technology innovation accounts for its leading position in the industry. Meitu has been continuously investing in scientific research, accelerating the pace of product innovation and upgrades, and building a solid “moat” with technological force.
According to the data, Meitu's R&D expenditure in the first half of 2021 reached RMB 259.5 million. Benefiting from investment in R&D, Meitu has built unique advantages in product differentiation, which enables it to meet the needs of different user groups and realize multi-channel income generation. At the same time, by continuously improving the user experience for its premium subscription services, Meitu has quickly found itself another growth contributor.
In addition, Meitu's core technological competitiveness has continued to increase. Its technological derivatives MT Lab and Meitu AI Open Platform are leading the innovative development of the industry.
Gary Ngan, Meitu’s Chief Financial Officer, said, "We are now seeing some exciting progress achieved in our new businesses and we hope that we can rapidly replicate our past successes with the correct monetization model. We are cautiously optimistic about remaining profitable for the full year of 2021. Although some business segments may face industry competition challenges, we will generate long-term shareholder value through technological development and business innovation."