‘Renren’, a leading social networking internet platform in China has announced its unaudited financial results for the second quarter which ended June 30, 2015.
RenRen Financial News 2015
“Founded in 2005, Renren.com (formerly Xiaonei.com) is the leading real name SNS in China.”
Chinese Social Media
The social network enables users to connect and communicate with each other, share information and user generated content, play online games, watch videos and engage with a host of socially orientated features and services. Renren’s businesses include the main social networking website and the game operating platform ‘Renren Games’. The website had approximately 227 million activated users as of June 30, 2015.
Highlights of the results:
–Total net revenues were US $15.1 million, a significant 34.0% decrease from the corresponding period in 2014.
-‘Renren’ net revenues were US $10.3 million, a 21.1% decrease
-‘Games’ net revenues were US $4.8 million, a 51.1% decrease
–Gross profit was US $5.2 million, a 53.6% decrease from the corresponding period in 2014.
Renren: These results are disappointing
These results are disappointing and reflect a considerable decrease in both net revenue and gross profit. Adjusting to the ever-changing demands of an increasingly competitive market has affected the businesses financial results significantly.
The decrease has been attributed to increasing competition and the continuing migration of the websites traffic to ‘mobile’. The decrease with regards to ‘Renren games’, was due to the previously launched games on the platform having reached their ‘mature’ stages. This is an indicator that new, interesting online games needs to be launched to ensure the success of the gaming branch of the company’s operations. The Chinese demand for new content is insatiable.
The results have fallen short of the businesses expectations The Company expects to generate revenues ranging from US $11 million to US $13 million in the third quarter of 2015, representing a 33.4% to 43.7% year-over-year decline.
A number of factors are key to influencing the success or failure of a social networking platform such as Renren.
Financial conditions, the expected growth of the social networking market in China, the demand for and acceptance of such services; the process of developing relationships with advertisers and customers, competition in the Chinese market and the government policies regulating the industry itself. All of these factors are at play and have to be taken into consideration.
This serves to demonstrate the importance of a comprehensive digital campaign that is flexible and specialized in the Chinese market place. Not keeping abreast of emerging trends such as the increasing ‘mobile’ consumer engagement can be disastrous. With increasing competition and upon consideration of the changing ways users engage with social networks a specialist, effective digital strategy is more vital than ever before.
More information about Social media in China