Hong Kong-listed Inke (HK.03700), once part of China’s first batch of popular livestreaming platforms, has seen its total revenue decline 15.3% year-on-year (YoY) in 2019 to RMB 3.3 billion (USD 464.9 million), marking a precipitous drop for the once-rising star, according to the firm’s annual report released on Saturday.
The firm also saw its adjusted net income slump by 88% from 2018’s RMB 596.3 million (USD 84 million) to RMB 71.5 million (USD 10 million).
Inke’s share price inched up by 3.03% to HKD 1.02 (USD 0.13) today at close after the announcement.
Launched in May 2015, Inke grew rapidly amid China’s livestreaming frenzy, which saw more than 200 livestreaming apps exist in China in 2016 at its height, with the market volume reaching RMB 25 billion (USD 3.5 billion), per data from Credit Suisse. The startup raised tens of millions of yuan in a Series A round from investors including SoftBank Asia Infrastructure Fund (SAIF), GSR ventures, and Purple Sky Capital in November 2015. It soon went on to close an RMB 80 million (USD 11.3 million) Series A+ round, led by Kunlun Wanwei, backer of self-driving startup Pony.ai and formerly the largest shareholder of gay dating app Grindr.
Inke claimed to have attracted 3 million registered users and more than 60,000 active livestreamers on its platform within half a year of launch and went public in July, 2018, on the Hong Kong Stock Exchange a stock price of HKD 3.85 per share. According to its prospectus, it had 25.3 million monthly active users (MAUs) in the first quarter of 2018, becoming the second-largest livestreaming app in China, with a market share of 15.3%, according to consulting firm Frost & Sullivan.
However, its growth has since stagnated compared to its the competition. Last year, the MAUs of the company’s apps (including its flagship Inke app, newly-acquired social app Jimu, and matchmaking app Duiyuan) was 29.8 million, up 17% from the prior year.
In comparison, short-video app Kuaishou, which added a livestreaming section on its app in 2016, announced it had more than 100 million daily livestreaming viewers in December 2019.
In its annual report, Inke said that the drop in revenue was partly due to fierce competition in the sector.
As the livestreaming industry took off in China, and competition ensued, many smaller players didn’t manage to survive when tech giants entered the battleground. Tencent, for example, backs the top two gaming-focused livestreaming platforms in China—Douyu and Huya—and is representative of the consolidation in the industry.
In 2019, Inke came up with a new strategy—merging interactive entertainment with social—in a bid to regain growth. As part of this, Inke bought Jimu, a Z generation-oriented social app, for USD 85 million. As of February, Jimu had a DAU of 1 million per data from China Merchants Securties. It also released a matchmaking app, dubbed Duiyuan, earlier last year.