With e-commerce firms coming close to reaching the maximum number of users in China’s first- and second-tier cities, the user dividend in high-tier cities is gradually being transformed and approaching the limit. As a result, in the third quarter, the growth of new users and revenue in the traditional e-commerce sector slowed significantly. This augurs the entry of the e-commerce sector into an era of segmentation in growth, as the new business model shifts from a focus on scale to one of improving efficiency.

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Joy Spreader Group Inc. (“Joy Spreader” or the “Company”, Stock Code: 06988.HK), a leader in new media performance-based marketing, has remained deeply engaged in the short video e-commerce marketing segment and, as a result, recorded high growth for the third quarter.

In an announcement released on November 29, Joy Spreader released its unaudited results for the first three quarters of 2021, during which, revenue reached HK$945 million (approx. US$121 million), an increase of 61.07% YoY. E-commerce product marketing business based on the DouYin platform posted revenue of HK$194 million, up 300.12% YoY. The e-commerce product marketing business maintained ultra-high growth, recording gross profit of HK$108 million, up 176.87% YoY.

The ability of Joy Spreader’s e-commerce marketing business to maintain the outsized growth despite the segmentation in the whole industry was driven not only by the expanding scale of the interest-based e-commerce business on the DouYin platform, but also by the gain in efficiency due to its advantage in data intelligence.

In recent years, recommendation-based e-commerce, in particular interest-based e-commerce on the DouYin platform, has become the largest growth driver in the e-commerce sector. Since the launch of interest-based e-commerce, the DouYin e-commerce ecosystem has been expanding rapidly. According to data released by DouYin, as of October 2021, the number of brands available on the DouYin platform had doubled in comparison to early 2021. During the November 11 sales period this year, the number of shoppers placing orders on the platform increased more than 100% YoY, while the number of repeat buyers increased nearly 200%.

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As soon as DouYin made its entry into the e-commerce sector, Joy Spreader was keen to grasp the opportunity. Since launching the short video-based e-commerce marketing business in 2019, the company has gained strong advantages in data and resources in terms of short video-based e-commerce on DouYin.

Joy Spreader covered 829,700 marketing points on the DouYin as of the end of September 2021, ten times that of the same period in 2020. Of them, 79,500 were active marketing points, up 199.05 percent year on year. Regarding marketing products, as of September 30, 2021, Joy Spreader had 358 products in its product library for e-commerce channels, an increase of 101.12% from 178 products in the same period of 2020.

Gaining strong advantages at both the platform and product ends in terms of data, Joy Spreader has, through continuous R&D investment, translated the advantages into more efficient intelligence algorithms, which, in turn, has improved marketing effectiveness. Data shows that Joy Spreader recorded average turnover per marketing point on the DouYin platform of HK$11,286.26 for the first three quarters of 2021, rising 16.57% from HK$9,681.71 YoY, driving a significant increase in the company’s overall performance.

As a leading technology-driven marketing technology company in China, Joy Spreader relies on innovations in data intelligence to improve marketing efficiency, forming a strong technological barrier and competitive advantage which has enabled the Company to maintain ultra-high growth in a highly competitive market. Joy Spreader is one of the first Chinese companies to apply an interest-based algorithm on the TikTok platform as a new approach to modeling the marketing business. In addition, the company has not only been conducting business tests on the platform for some time, but has also started taking a close at the application of a closed transaction loop to traffic from TikTok, sales enhancement via the algorithm and intermediary page-based transactions, in tandem with localized warehousing, payment and logistics, accumulating, as a result, valuable data and industry resources.

Looking ahead, Joy Spreader will continue to improve marketing efficiency with data intelligence algorithms, expand interest-based e-commerce marketing business overseas, and empower the efficient and healthy development of the e-commerce marketing sector with its advantages in advanced technology.

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