Bilibili’s Never Been Hotter, So Why Are Its Shares Sliding?

Bilibili has moved quickly to diversify revenue streams, but is it enough to boost share prices?

Key Takeaways:

  • Video-sharing platform Bilibili has broken out of its singular focus on anime, comics, and games and gone fully mainstream in recent years.
  • The platform has more than 267 million monthly active users (MAUs) and is expected to surpass 400 million MAUs by 2023.
  • Yet rising marketing costs, mounting debt, and pressure from Beijing regulators have sent Bilibili shares into freefall over the past 10 months.

After years of steady growth as it cornered the once-niche “ACG” (anime, comic and games) subculture, the nearly 13-year-old Nasdaq-listed video-sharing platform Bilibili (Nasdaq: BILI) has only gone mainstream in China over the past few years. In that time, the platform — famous for its “bullet chats,” real-time comments that fly across the screen while users watch videos, and a vast amount of professional, user-generated content — has attracted tens of millions of new users. But perhaps more importantly, the platform has piqued the interest of brands across the consumer spectrum, among them Dior, Shiseido and Mercedes-Benz, drawn to the platform’s long-term growth potential.

User acquisition remains robust, with Bilibili’s average monthly active users (MAUs) rising 35 percent year-on-year in Q3 2021 to 267.2 million and mobile MAUs increasing 36 percent to 249.9 million. According to a company release, by 2023 Bilibili’s MAUs are expected to reach 400 million, with the majority of those users millennials and Gen Zers. For brands, the platform remains attractive owing to its predominantly young user base — 86 percent of Bilibili users are under the age of 35.

These young users are engaged and eager to use the platform to create, not just consume, content. This month, the company released its first creator report, which claimed 2.7 million active uploaders per month, a rise of 61 percent year-on-year, and more than 10 million monthly video uploads, up 80 percent in just one year. While user stickiness is trending downward somewhat as Bilibili becomes more mainstream, it remains high with the average user reportedly spending 88 minutes per day on the platform.

Where Bilibili really shines is in its ability to attract and retain paid users and advertisers. In the third quarter of this year, Bilibili’s average monthly paying users (MPUs) rose 59 percent year-on-year to 23.9 million while total net revenues leapt 72 percent year-on-year to RMB 4.49 billion ($705.5 million). In the fourth quarter of this year, Bilibili expects net revenues of between RMB 5.7 billion ($895.87 million) and RMB 5.8 billion ($911.59 million). Continue to read the full article here