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PE Interview With Social Networking Site Heiyou
Tags: Baihe, GSR Ventures, Heiyou, Internet, Jason Tian, Match100, Mayfield Fund, e-commerce, social networking,
Heiyou.com, which was launched in late 2003, is one of dozens of social networking websites in China. After finding that many of its users were looking for romance through the site, Heiyou's founders decided to launch a separate dating and matchmaking site, and Match100.cn was born. With competition cutthroat in the social networking space, Heiyou is focusing the majority of its resources on Match100, which recently changed its name to Baihe.com. Heiyou also recently received venture capital investment from the Mayfield Fund and GSR Ventures (rumored to be in the range of several million US dollars) to fund the expansion and development of Match100.
Pacific Epoch recently spoke with Heiyou founder and CEO Jason Tian about the growth of Match100, the state of China's social networking website market and how Heiyou plans to generate revenue from the service.
PE: Can you give me a brief introduction of Heiyou's development since its founding?
Tian: The company was founded in early July 2004, but the website was launched at the end of 2003. In May 2005, we launched the new dating and matchmaking website Match100.cn, which has now been moved to Baihe.com. We received our first round of venture capital from the Mayfield Fund and GSR Ventures in October 2005. The two existing investors will soon begin a second round of investment, and we also intend to introduce new investors.
Mayfield and GSR have taken about a 30 percent combined stake in the Heiyou. Heiyou management also hold shares, but my partner Jiang Qian and myself still hold the largest stakes.
PE: How has the Match100 business developed since it was launched?
Tian: The business has grown beyond our expectations. The site now has three million users. We registered 870,000 new users in December 2005. We are now seeing 20,000 to 60,000 new users each day and the site is now ranked between 100 and 400 on Alexa. We have not had to face any real competition so far.
PE: How many users do you predict for Match100 by the end of 2006?
Tian: At least ten million.
PE: Is Match100 free?
Tian: No, we have already begun charging for the service. We charge one a monthly, quarterly or annually fee. Currently the service costs 25 Yuan per month.
PE: How does the Match100 service work?
Tian: Each new Match100 user takes a psychology test. Users do not need to pay to take the test, set up a personal portfolio or to receive recommendations on who to date from Match100. However, if they want to contact someone, they have to pay. We currently also provide a free membership service based on recommending new users but we will begin charging for this service in the second quarter of 2006.
PE: What kind of services do you provide to your paying users?
Tian: The main service is that they will have access to many methods for contacting possible matches. Paying users will also be able to contact non-paying members. We are planning on launching a more flexible charging system in the second quarter - for example, we may charge users for each contact they make. We will also develop new value added services, such as identification authentication.
PE: How many paying users do you currently have?
Tian: Because we are still mostly focused on growing the service, we only have about 5,000 paying users. In the third quarter of this year, we will gradually begin cutting back the free services and will make our promotions that give users free membership when they recommend new users more strict.
PE: Does Match100 have revenue sources in addition to subscriptions?
Tian: We will also be developing an advertising business and improving our wireless value added services (WVAS). We hope to launch a mobile version of Match100 soon.
PE: What was the motivation behind launching Match100 as a separate dating site?
Tian: We found that 70 to 80 percent of Heiyou users were using the service to find boyfriends or girlfriends. This led us to launch the more focused matchmaking site Match100. It is difficult to find an ideal match on traditional social networking sites. While some people have no problem spending two to three hours per day surfing these websites, some users may want a more efficient way of finding their ideal date or spouse. Match100 is tailored for these users. We have a database and conduct our "love" assessment of each user, which allows our system to automatically do the matchmaking, ultimately saving time for our users. Results are far more important than processes in matchmaking. If a user still had to spend a lot of time locating Mr. or Ms. Right, our service would be just like any other social networking site. What we are trying to do is help users find their lovers in the shortest time possible. Heiyou.com is more for people that are not too serious about finding a girlfriend or boyfriend and have more time to kill.
PE: Do you have a system to track results of matches made on Match100?
Tian: Right now we do not have such a system. As soon as our users receive instructions on how to contact their matches, they are under no obligation to update us of the courtship. Some users will call us or write e-mails to offer their thanks so that we know the match was a successful one. We will try to work out a way to track match results in the future, but we can not, of course, force our users to tell us about the results.
PE: Are there any fee-paying services for Heiyou?
Tian: Heiyou is totally free. Our revenue for the site comes mainly from advertising.
PE: Will Heiyou or Match100 be the main focus of the company?
Tian: Mayfield and GSR invested in Match100, and our major efforts are directed at Match100.
PE: How do you promote Heiyou and Match100?
Tian: Currently the primary way is through online advertising. We also advertise on search engines, such as Google, Baidu and Yahoo search engines. Also we have tried some e-mail marketing and put some advertisements on portals such as Sina and QQ.com. We put the majority of our advertisements on QQ, but I think QQ users are too young for our services. More than 80 percent of them are under 20.
PE: What is the size of the Heiyou staff?
Tian: We have nearly 40 employees, half of whom are R&D staff. Others work in marketing, customer service and administration. However, we plan to expand our company to between 100 and 150 employees by the end of the year. Many new staffers will work in the marketing and WVAS departments, but the biggest increase will be in our customer service team. We will also add ten R&D people.
PE: What types of business partnerships have you formed with Match100?
Tian: In the early stages we conducted our business independently. Now we are planning to cooperate with broadband service providers such as China Netcom and China Telecom. We also plan to partner with niche e-commerce companies, especially online flower shops and gift shops. We do not necessarily need to offer comprehensive e-commerce services; we only need those that offer services closely related to the dating business. Even if we partner with a company such as Taobao or Dangdang in the future, we will only advertise on specific channels. We are now negotiating with potential partners. We will also collaborate with some Web 2.0 companies on RSS services.
PE: Who are your key competitors?
Tian: Before launching Heiyou, there were already hundreds of social networking websites in China. However, these sites are all very similar: users upload photos and basic personal information and then contact each other. 96333.com is the oldest among them; that site has been around for five or six years. Pengpeng.com's Marry5.com is the most similar website to Match100. In the future there will be more competition, but we are not worried. 96333 has registered only three million users since its founding; it took us only six months to reach that number. We also have a six month head start on Marry5.
The biggest challenge facing all social networking companies is convincing people of the value of these services.
PE: How do you see the future of China's online dating and matchmaking services?
Tian: The websites should try to provide more accurate matches and better communications between users. Social networking websites should not bombard their users with huge amounts of incomplete user information, which is a waste of time.
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