China

The business of online dating continues to grow, as more apps enter the market and compete for funding from investors ready to cash in on the next Tinder. The latest financial news in the industry involves popular gay dating app Grindr, who just announced that Chinese online gaming titan Beijing Kunlun Tech has taken a “majority investment” in their app.

According to The New York Times, Beijing Kunlun’s stake in the company will be about 60%, with the remainder to be owned by Grindr employees and Joel Simkhai, the company's founder. The valuation of Grindr seems to be about $155 million according to the same article, although the actual amount invested was not disclosed.

Interestingly, Grindr had not raised capital from outside investors prior to their deal with Beijing Kunlun. The company was started and funded by Simkhai himself, who began with only a few thousand dollars. He grew the company and the brand: according to PC Magazine, the average user spends up to 54 minutes a day on the app – a figure that exceeds Facebook’s 42 minutes and Instagram’s 21 minutes.

According to leaked documents back in August, Grindr predicted pulling in about $38 million for 2015.

According to Financial Review, Carter McJunkin, chief operating officer of Grindr said in an interview: "We have users in every country in the world, but in order to get to the next phase of our business and grow faster, we needed a partner," McJunkin added that the relationship made sense for Grindr because of Beijing Kunlun's digital expertise, and because the company agreed to let Grindr's founders continue its operating structure and retain its current team.

Beijing Kulun saw Grindr as a good opportunity to expand beyond its core gaming focus, into more of an overall “lifestyle” brand. 

It’s interesting to note that Beijing Kunlun’s choice to purchase stake in a gay dating app seems incongruous, since homosexuality is still a taboo subject in China, and many gay people face widespread discrimination. It is not clear if Grindr intends to expand its business into the Chinese market, but there would be social stigma to overcome.

Beijing Kulun might see Grindr as a sound investment above all, despite its target market. Or perhaps they are paving the way for other Chinese investors to expand and reach out to invest in more diverse, successful brands outside of China. "We have been very impressed by Grindr's progress to date and are extremely excited about the future of the company," Yahui Zhou, chairman of Kunlun, said in a statement. "We will continue to seek out and invest in high-quality technology companies led by top-tier management across the globe.” For more information on this gay dating app you can check our our Grindr Topic.

Forget Black Friday. Forget Cyber Monday. China’s Singles' Day is now the world’s biggest online shopping bonanza.

The holiday, an anti-Valentine's Day for single people, traces its origins back to Nanjing University in 1993. Students began celebrating the single life annually on November 11, a date chosen because of the connection between singlehood and the number 1. Upon graduation many continued the tradition and the celebration of Singles' Day is now widespread amongst young Chinese people.

To mark the occasion, Chinese singles party with other single friends. The festivities can include a special breakfast, karaoke and blind date parties hosted in attempt to end singlehood as soon as possible. Singles' Day has also become the largest online shopping day in the world, with sales in e-commerce giant Alibaba's sites Tmall and Taobao clocking in at US$9.3 billion in 2014.

Yes, $9.3 billion. That’s more than the total U.S. online sales on Black Friday and Cyber Monday combined in 2014. And no one got run over in a tragic store stampede.

Singles' Day shopping originated with Alibaba, but today merchants throughout China participate. Shoppers can score major deals on clothing, cosmetics, electronics and even food. Looking at the numbers will make your head spin:

• Alibaba's Singles' Day 2015 selection will include 6 million products from more than 40,000 merchants, and over 30,000 brands from 25 countries
• China’s post office estimates that nearly 800 million packages will be shipped as a result of the hoilday
• A Nielsen survey found that 56 percent of more than 1,000 internet users in China said they would increase spending compared with 2014
• Consumers are expected to spend an average of $277 per person, up 22 percent year on year
• Alibaba estimates that 1.7 million deliverymen, 400,000 delivery vehicles, 5,000 warehouses and 200 airplanes will be necessary to handle the deliveries

If predictions are accurate, 2015 could be the biggest year yet for retailers on Singles' Day. Alibaba sales could hit $10 billion in a 24-hour period.

"It's not a huge surprise that consumers are planning to spend more during this year's 'Double 11,'” Yan Xuan, President of Nielsen Greater China, told CNBC. “Income levels and internet penetration continue to rise throughout China, so this is a natural progression.”

Singles' Day is also expanding worldwide. Five thousand overseas brands from 25 countries – including the U.S, Europe, Japan and South Korea – will be available this year. This year's international participants include Costco, LG Electronics, Walt Disney Co., Fisher-Price and Lego. In recent years, Apple, Calvin Klein, Macy's and Burberry have participated.

Perhaps Singles' Day itself will soon be a global phenomenon.

Every week, someone's in the news with a cautionary tale of online love gone wrong. Online dating critics are quick to point out the threat of scammers, but how big is the risk really?

Apparently a lot bigger if you live in China. A new study of the largest online dating site in China discovered hundreds of thousands of con artists, and their scams are far more intricate than simply lying about their age or adding an inch to their height.

The study, “Quit Playing Games With My Heart: Understanding Online Dating Scams”, is a collaboration between University College London and Jiayuan. Together they analyzed more than 500,000 profiles, drawn from Jiayuan’s 100 million users, which had been flagged as scam accounts.

The most popular scam – fake profiles promoting escort services – will be familiar to users of any dating service in any country. What's really interesting are the more intricate, culturally specific cons.

Take “the flower basket.” In this scam, lonely middle-aged women are targeted by “attracive mid-age men” who contact them and develop an entirely digital romantic relationship. Once a solid connection has been established, the man will imply that he wants to get married, but that his parents require a gesture of goodwill.

He'll then explain that the gesture is an expensive flower basket that can cost as much as $20,000. The man will refer his target to a florist he has teamed up with, who gives him a cut of the money after the purchase is made.

In another surprisingly ingenious scam, a female fraudster is hired by the owner of an expensive restaurant. She joins a dating site and asks a target to take her to the restaurant she's affiliated with. She'll run up an enormous tab (anywhere from $100 to $2,000) during the date, then disappear, never to be heard from again.

“The success rate of this type of scam is much higher [than traditional online scams],” write the researchers, “because the scammer leverages the desire of the victim to meet an attractive woman. In addition, it is likely that the victim will never realise that he has been scammed, since the date really happened, and the victim possibly had a good time.”

It’s also, according to the study, not strictly illegal, so the con artists involved don’t put themselves at much of a risk. That's some seriously next-level scamming.

Just be glad these shakedowns haven't made their way abroad yet. Or have they? Be on the lookout for pricey flower arrangements.

Dating in China just got a whole lot harder. The country's internet regulator, the Cyberspace Administration of China, has closed down 128 online dating sites suspected of violating regulations and supplying false information.

The websites were shut down for a lengthy list of allegations, including organized prostitution, disseminating pornographic images, promoting vulgar content, allowing user information to be distributed illegally, and not having complete sets of registration records.

This crackdown comes after the CAC joined forces with several government agencies – including the Ministry of Public Security, the All-China Women's Federation, and the Ministry of Civil Affairs – to conduct a clean-up operation. The offensive began in February, driven primarily by tips from the public. Users are still encouraged to report illegal websites through hotlines, e-mail or mobile apps.

"The operation has achieved a good result. It acted as a deterrent to violators and also had positive impact on the industry's development," said the CAC in a statement. With the way paved, the plan is to create guidelines to ensure dating sites provide fair and honest service.

Other dating services have expressed support, saying the new policies will be good for the industry's long-term development. Wu Linguang, CEO of leading Chinese dating site Jiayuan.com, has come out in favor. The CEOs of Baihe.com and Youyuan.com have also both expressed support for the campaign.

Aside from targeting prostitution and fraudulent practices by service providers, the CAC's crusade tackled the issue of authenticity. Some services were accused of failing to enforce controversial 2012 regulations requiring users to give their real names and national identification numbers upon registration. These sites have been asked to enforce real-name registration to protect users against dishonesty and scammers.

Some believe these are advantageous moves that will help maintain a fair and competitive online market, and improve legal consciousness. Others are less convinced by the ostensible motives.

Chinese internet users have poked fun at the crackdown and questioned its intentions. Critics claim campaigns purporting to safeguard moral standards and related laws are merely a pretext for political censorship.

This is not the first time China has made such a bold move. Last year, in a similar effort to stamp out prostitution and pornography, the country closed nearly 1.8 million social networking and instant messaging accounts.

Not the first time, and likely not the last.

Dating app Coffee Meets Bagel has taken a back seat to the spectacular rise of Tinder the past few years. This however has not daunted the company’s founders, three sisters who left their cushy corporate jobs to fulfill their entrepreneurial dreams. (Not to mention, they wanted to create a dating app that they would like to use!)

Now, the company has taken its carefully executed roll-out in the U.S. and is expanding internationally. Hong Kong was the first place outside of the U.S. where the service was launched.

CMB takes its operations seriously. Instead of giving in to the “more is more” trend in dating - offering unlimited looks at profiles and encouraging users to choose “yes” or “no” in a matter of seconds – this dating app offers users one match per day. And you have 24 hours to mull it over, choosing to like or pass. If you like, you have a week to make a real date happen through the app’s private chat line, or it’s on to the next. In other words, it forces users to carefully consider and follow through, instead of swiping at will and sending a few messages that never lead to a date.

Facebook is a key platform in spreading interest in the app overseas, since Hong Kong users (according to a recent article in Forbes) have an average of 768 Facebook friends each, eight times the worldwide standard. Also, Hong Kong is a highly social city, although people spend more time at work than they do trying to meet people to date. It made for the perfect place to launch the dating app’s international roll-out.

Co-Founder Dawoon Kang lived in Hong Kong for three years, experiencing the dating scene for herself. (She and her current boyfriend met over CMB). “Hong Kong is a very young, vibrant city full of ambitious singles in their 20s and 30s who are eager to meet new people but have very little time for it. Coffee Meets Bagel was designed with these young professionals in mind, which made Hong Kong our perfect market – and our initial results show that,” she told Forbes.

On average, Hong Kong users are logging in 4.3 times per day (33% more than U.S. members), and 72% log in each day to check their matches. Like in the U.S., more CMB members are female – 62% of the Hong Kong user base are women, although there are more single men overall in China.

The service launched in Hong Kong on March 4^th, and before the month was over, the company had made 3,000 connections. According to Kang, CMB has also achieved consistent 20 percent week on week growth.

Jiayuan.com, the largest online dating site in China, surpassed the 110 million registered users mark on June 29, 2014.

Jiayuan got its start a decade ago to address the unique needs of China's rapidly growing urban singles population. The website was a pioneer in China's online dating market, and now ranks first in the country in terms of number of unique visitors, average time spent on the site per user, and average page views per user. Over the course of its 10-year history, Jiayuan has facilitated 12.3 million matches in China.

The site has become so big that, according to comScore, it accounted for more than half – 58.4% to be exact – of the total time spent on online dating in China in March 2014. It is the 60^th most visited website in the country according to Alexa.com, and the 336^th most popular website in the world.

Jiayuan.com hit the 100 million registered user accounts milestone back in January 2014, adding 10 million more users over the course of the last six months. "I am pleased to see Jiayuan's registered user accounts surpass the 110 million mark as we continue to gain momentum from our solid start to the year," commented Mr. Linguang Wu, CEO of Jiayuan, in a press release. "Passing the 110 million milestone speaks to the strength and growing popularity of our platform as we make the investments needed to increase our brand equity and solidify our leadership over our competitors. These investments include ramping up mobile monetization now that we have successfully grown our mobile platform to include 24.8 million registered user accounts and 31.2 million activated installments as of June 29, 2014."

One of Jiayuan’s recent investments is a partnership with animation firm Up Studios, whose brand Piggy in Love (which follows a pig looking for his lost love) will be featured in Jiayuan’s new mobile app. Through their licensing agreement, Jiayuan users will be able to send romantic animations and Piggy in Love emojis in their messages.

Mr. Wu concluded, "Looking to the future, we will continue to build upon this massive database of marriage minded singles by integrating it with our proprietary CRM system in an effort to consolidate the traditional matchmaking business in China which we believe is poised for a period of explosive growth. 2014 is an important year for us strategically as we make investments in our database of eligible singles to generate new revenue streams and ensure the long-term sustainability of our business."