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Joy Spreader Embracing Marketing through Premium-placed Short-form Videos, Leads to a Promising Outlook

Joy Spreader Embracing Marketing through Premium-placed Short-form Videos, Leads to a Promising Outlook

BEIJING, Sept. 7, 2021 /PRNewswire/ -- On August 30, Hong Kong-listed Joy Spreader Group (HKG:6988, "the Group", "Joy Spreader") announced its 2021 H1 results. The H1 financial report shows that the performance-based marketing business based on short-form video (SFV) has becomes an important part of Joy Spreader's portfolio. In the first half of 2021, Joy Spreader's e-commerce products marketing business maintained a high growth of 285.24 per cent in revenue, surging to HK$129 million (approx. US$16.5 million).

The firm achieved revenue of HK$624 million (approx. US$79.8 million), an increase of 62.37 per cent from the same period of the prior year. Gross profit for the period grew 105.15 per cent, to HK$214 million (approx.US$27.4 million), while net profit excluding foreign exchange losses climbed to HK$137 million (approx. US$17.5 million), an increase of 102.26 per cent year-on-year.

The strong advantage of its e-commerce business driven by SFVs is a result of the rapid explosion of the SFV-driven e-commerce market in China. As of June 2021, China was home to 888 million viewers of SFVs, representing an increase of 14.4 million from December 2020 and accounting for 87.8 percent of all Internet users in the country. Among them, daily active users on Douyin exceeded 600 million.

The growth in the number of SFV viewers has also driven the expansion of the SFV-driven e-commerce market. Combined Gross Merchandise Value (GMV) of e-commerce merchants on Douyin exceeded 500 billion yuan (approx. US$75 billion) for the whole of 2020 and is expected to almost double to 1 trillion yuan (approx. US$150 billion) in 2021. A review of the industry's course of development reveals that the iterative evolution of the SFV content-driven e-commerce business happened amazingly quickly, growing from nothing to a sector that brings in trillions of yuan annually in a span of about five years.

In 2016, the Douyin App was launched, and some entrepreneurial users began to leverage it to market products. In 2018, Douyin launched the Douyin Shop platform, which supports direct links to Taobao. With the launch, the SFV content-based e-commerce business formally took its first step in taking shape. In terms of scale, in 2020, live streaming e-commerce merchants (including SFV-based e-commerce merchants) achieved sales of roughly 1.1 trillion yuan (approx. US$170 billion). Such rapid growth shows how consumption habits around the new business form are already well established.

As one of the first marketing technology companies in China to take advantage of the SFV-driven e-commerce performance-based marketing segment, Joy Spreader has been strengthening its presence in the segment over recent years. As of June 30, Joy Spreader had covered 657,344 marketing points on Douyin, an increase of 720.23 percent over the same period last year. Among them, 65,237 were active marketing points, an increase of 215.93 per cent year on year. Averaged GMV of active marketing points on the Douyin platform also showed a year on year rise of 15.24 per cent to HK$9,920.44 (approx. US$1,296.8).

Thanks to the increased number of marketing points and enhanced average GMV of a single marketing point, Joy Spreader's GMV of e-commerce products rose 264.08 per cent to HK$647 million (approx. US$82.8 million) in the first half of 2021 from HK$178 million (approx. US$22.9 million) in the same period of the prior year.

Joy Spreader's advantage by way of the vast number of marketing points is also reflected in its e-commerce marketing plan for overseas markets. E-commerce platforms with global reach, taking the immensely popular TikTok serving as a prime example, are in the initial stages of monetization and on the verge of offering huge growth potential. TikTok has accumulated a huge number of users and a massive amount of online content. Joy Spreader has built a new technology model and service system in response to the characteristics of mobile new media operators and the market environment outside of China, and plans to build a business closed-loop for different local markets by improving the logistics around the supply of goods, as well as the quality of the new media content, the traffic, the data analysis and the matchmaking technology. Joy Spreader has established Hainan Joy Spreader Interactive International Technology Co., Ltd, an e-commerce marketing subsidiary. The Group plans to launch the e-commerce marketing service first in Southeast Asia, followed by the anticipated expansion of the service into other countries and regions worldwide.

At the same time, as mobile new media social platforms are actively advancing their transformation into video-based media, the Channels launched by WeChat has also become a new platform into which Joy Spreader intends to expand. As of June 30, Joy Spreader covered 31,300 marketing points on the WeChat Channels platform. As the ecology of WeChat Channels continues to improve, Joy Spreader's forward-looking expansion plan on this platform will also deliver to the Group a great first-mover advantage.

With the further expansion of the e-commerce market space on Douyin, TikTok's accelerated commercialization process and the gradual improvement of the WeChat Channels ecology, Joy Spreader has gained a strong advantage with a deep penetration through its multitude of covered SFV-based marketing points. The SFV-driven e-commerce product marketing business of the Group is expected to maintain ultra-high growth.

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