Decline as users flock to WeChat
Weibo’s earlier strategy during it’s first several years was straightforward and effective — to a point. Inviting celebrities, gurus and business leaders to its platform brought Weibo to its heyday in 2011, but it wasn’t long before the lustre of that strategy began dulling and talk of users abandoning Weibo started becoming more common.
- A report by research institute GlobalWebIndex indicated Weibo’s active users plummeted 40% from Q2 2012 to Q4.
- In 2013, Weibo’s situation only became worse as the platform declined significantly, with their active userbase having dropped so low, that industry reports at the time suggested that only 10% of its users were actually active.
Although the decline was driven by many external factors, the main contributor was almost certainly the rapid rise of WeChat at the time, which by taking advantage of Weibo’s deficiencies, was able to quickly expand to as high as 200 million users in just two years (2011 to 2013).
Grasping the mobile trend
Fortunately, Weibo took this challenge and used it to better itself. In order to set itself on a course back to its former glory, Weibo first set out to grasp the mobile trend in lower tier cities. By the start of 2013, mobile was a priority for Weibo, and at the forefront of their marketing strategies.
- By establishing alliances with local smartphone brands to pre-install its app on new smartphones, Weibo was able to express to a significant portion of users, their new approach and brand image.
- Partners included Xiaomi, Meizu, OPPO and Vivo, all of which are top domestic brands with huge numbers of users in lower tier cities.
Though at the time, the company’s decision to look towards the mobile trend would be more so towards returning Weibo to an acceptable point, this shift would actually pay off tenfold of what they most likely expected — with mobile MAU of Weibo on domestic smartphones increasing a whopping 98% YoY from Q2 2015 to 2016.
Expanding the target audience through content shift
Adding to this, Weibo also changed the direction of its content from serious social affairs, which inherently has a higher intellectual barrier, to entertainment which is more accessible to all.
It also made public discussion on Weibo more inclusive and more preferable for Weibo’s new target users, who were primarily interested in the pursuit of entertainment.
Sealing the deal — placing emphasis on multimedia content
Beyond attracting users to the platform, Weibo has also put in place measures to keep users on the platform as long as possible by introducing multimedia functions.
It also made public discussion on Weibo more inclusive and more preferable for Weibo’s new target users, who were primarily interested in the pursuit of entertainment.
- In 2016, Weibo integrated live streaming app, Yi Zhibo into the platform.
- Using this function, web celebrities on Weibo have become more engaged than ever, interacting with fans through live streams, driven by a new channel to pocket money from fans.
- As of June 2016, an average of 7.73 million users were watching live streams on Weibo daily, spending 387,000 hours in total per day on the platform for live streaming content.
Focusing on these types of user generated video content were the key to rejuvenating the platform and will continue to open opportunities for Weibo to grow and boost their own brand image and identity for the coming years.
- According to Wang Gaofei, the CEO of Weibo, user generated video content such as live-streaming and short videos will be the key area for the platform to sustain the current growth.
Results and financial report
These changes have had a significant impact, resulting in significant growth and revenue over the last three years.
- Beginning in 2014, Weibo saw a drastic net revenue growth of 47% year over year to $105.2 million, along with a MAU of 175.7 million for December, an increase of 36% from the previous year; a slow but reassuring stat for what was to come.
- In 2015, Weibo reported net revenues of $149.0 million in Q4 2015 compared to $105.2 million for the same period in 2014. Advertising and marketing revenues totaled US$129.5 million in Q4 2015 compared to US$88.0 million in Q4 2014.
- The year 2016 follows roughly the same trend, however what is truly noticeable is Weibo’s Q1 2017 financial report; with a net revenue of $199.2 million, a whopping 67% improvement from the same period in 2016, along with over 340 million monthly active users (MAU), over a 94% growth from 2014.
Owing to their new outlook and brand focus on user generated video content, along with the size of the live streaming market, Weibo still has great potential to boost its user base. An estimation by Morgan Stanley predicts that Weibo will see monthly active users of 400 million by 2018, and with the results from this year’s Q1 together with the trends seen in the past several years, this doesn’t sound so far-fetched.
Looking forward — introducing Weibo Story
One function that Weibo hopes to present by the end of the year in full, is Weibo Stories. In the West, one tool that has gained popularity among luxury brands due to the sense of exclusivity, is Instagram Stories. Knowing this, it is likely that Weibo hopes to replicate this concept and give brands in China the opportunity to fulfil that void.
- The alpha version of Weibo Story was released earlier this year on April.
- Weibo Story allows users to upload photos and videos with a range of text and drawing tools being available.
- Like Instagram, stories on Weibo will also disappear after 24 hours and stories of followed accounts appear on the top of users’ feeds.
Looking at the way Western luxury brands use Instagram Stories, the version that Weibo has come up with should offer the opportunity to fulfil similar needs of brands in China.
“We have statistics that show that 10 percent of our sample users of Weibo Story have used the functionality every day,” said Wang and compared it to Instagram Stories, which currently engages approximately 40 percent of daily active users. “Looking forward,” Wang added, “we will mainly focus on this area to further optimize users’ experiences.”
Weibo although not as prominent as WeChat, is no longer a platform lurking in the shadows of bigger platforms. If there’s one thing that these past several years has proved, it’s that Weibo is just as strong of a competitor and marketing tool as WeChat, and judging from what’s to come (such as their adaptation of Instagram’s popular Stories function), brands should expect to see Weibo continue to become increasingly potent as time goes on.
