The acquisition of Tantan by Momo clears its path for market domination. Is this a match made in heaven?
On February 23rd, Momo, the popular Chinese dating and hook-up app, announced its acquisition of its main competitor Tantan.
According to the official statement from Momo, the firm acquired 100% of Tantan’s stock share at the price of $ 600 millions.. Momo’s CEO Tang Yan asserted the importance of the acquisition by highlighting the unique features of the Tantan application. At the same time, he spoke about Momo’s plan to diversify its products and develop more applications to fulfill the needs of the Chinese market.
Tantan is a Tinder-style application. Users can view pictures of others and swipe left or right according to their preferences. The app will use mutual interests to make connections that could lead to something more.
New opportunities and female users
In spite of its reserved and conservative culture, the most populated country in the world shows a huge demand for these hook-up/dating services. Here, strangers could be matched for social events, relationships, and potentially even marriage. A recent survey shows that 43% of the Chinese population has tried online dating. Additionally, 48% of male users and 37% of female users have tried such services in response to their family’s pressure to find a partner.
Momo was going public on Nasdaq
Tinder, synonymous in other parts of the word with hook-ups, has however missed the huge opportunity presented by the Chinese market due to its strong dependency on Facebook and Instagram. So while Tinder itself is not banned in China, the blocking of Facebook and Instagram has severely impacted Tinder’s ability to expand its user base. Thus, Momo, Tantan and other such apps pounced on the opportunity to become China’s Tinder.
Momo’s acquisition of Tantan brings both sides more opportunities: Momo will benefit from the large number of female users in Tantan and the additional features powered by Tantan. Female users are crucial to the success of any dating app. Momo’s users are predominately men, so it is theoretically possible that this union will bring together the Yin and Yang of hook-ups.
Tantan, on the other hand, can potentially receive additional funding from Momo while enjoying the benefits that a larger platform can offer. The biggest benefit is the much larger user base. According to Momo’s official financial statement in 2017, the app had already accumulated 85 million daily active users.
There are other dynamics at play. Momo has collaborated with various online-streaming platforms such as Kwai and Inke to run a trial of live-streaming services. Such ploys have worked well, as is shown in Momo’s exponential growth in the past two years in two key areas: number of users and duration of usage. In 2017, Momo developed various new features such as video chats between strangers, online social games and online video parties. These unique features have helped the dating app prevail in spite of harsh competition in the market.
Overcoming the cultural barrier
Growth and vision notwithstanding, Momo, like any other dating and hook-up application, faces challenges from a conservative Chinese society and resultant pressure from regulatory authorities.
Hook-up is a cultural taboo in China. A majority of the population finds pre-marital sex unacceptable. A woman’s virginity is seen as a sign of her strong moral character.
Hook-up applications such as Momo, Tantan, and the already defunct Wumi are therefore facing a huge backlash from society. It doesn’t help that vulgar and sexually-explicit content is common in these. Such content, in fact, brings the scrutiny of regulatory authorities while eroding hard-fought social acceptance.
Tantan, copycat of Tinder
It’s not surprising that Momo has invested heavily in whitewashing its public image. It recently added the live-streaming feature and online in-app games in an obvious attempt to move away from the original ‘hook-up’ style. However, with the Chinese cyberspace regulations starting to impose strict controls on streaming and video applications, Momo not only faces the perceived ethical dilemma, but also needs to find platform new way to bring and retain users in its established platform. Live-streaming functions are no longer a safe and easy way to attract users. Momo is therefore attempting to find a new ark to board.
The acquisition of Tantan is one move in this direction. It consolidates its dominance in the dating/ hook-up market in China. So the primary challenge will not come from the competition, at least in the short to medium term.
With a richer set of features and more women users, Momo now needs to find growth paths that are acceptable to a conservative society and the eagle-eyed regulatory authorities.