Bilibili’s new markets grow users, but also losses

Bilibili, the Nasdaq-listed online entertainment & video-streaming platform, released its financial results for the third quarter on November 18. The Chinese powerhouse saw a 74-percent increase of total net revenue to $475.1 million (3,225.7 million yuan), year-on-year. But also of significance was that the platform’s amount of monthly active users (MAUs) hit 197.2 million over the period, and that number exceeded 200 million in August — a new monthly record.

However, Bilibili’s net losses grew to $162.1 million (1.1 billion yuan) over the quarter (up 171 percent year-on-year), which was partially due to increased operating expenses for sales and marketing earmarked at roughly $175.3 million. Nevertheless, the platform’s investment in expanding brand awareness has paid off with exceptional user stickiness, as its average monthly paying user number has jumped to 15 million, an uptick of 89 percent compared to the same period a year earlier.

This solid user growth was fueled by Bilibili’s quality-driven content strategies aimed at various online communities among the younger Chinese generations. Its widening viewership and engagement weren’t only driven by anime and esports streaming, though, but also variety shows, drama series’, and documentaries that the company produced. In particular, Rap for Youth — a Gen-Z-oriented rap show — received the highest rating on Douban (the Chinese equivalent of the American film review website Rotten Tomatoes), generating 410 million views.

“Engaging content and community experience” are two of Bilibili’s core competencies, as highlighted in a statement by Rui Chen, the chairman of the board and CEO of Bilibili. He also added that the company is now “committed to further improving our brand equity and capturing this market opportunity [of video-lization].”

Also of note is how Bilibili has reported a more-balanced revenue structure, thanks to the increasing profitability of non-game businesses. Value-added services, advertising, e-commerce, and other markets showed strong monetization capabilities (60 percent of total revenues), estimated at $289.3 million in total. But among these categories, Bilibili’s e-commerce — a growing sweet spot for video platforms — has been relatively modest compared to the efforts of competitors like Red (Xiaohongshu) and Douyin, especially considering the platform’s concrete user base.