Joy Spreader Group Inc.(HKG:6988, “the Group”, “Joy Spreader”), a leading marketing technology company, consolidates its leading position in the new mobile media-based performance marketing sector with strong interim results released on Aug. 30. The Group achieved revenue of HK$624 million (approx. US$79.8 million) during the first half of 2021 that ended June 30, 2021, whereby the firm, an increase of 62.37 per cent from the same period of the previous year.
Over the past few years, Joy Spreader has been expanding its footprint in the new mobile media-based performance marketing sector, contributing to the strong growth of the Group’s interim financial results. Gross profit and net profit excluding extraordinary items for the period also grew 105.15 per cent and 102.26 per cent year on year to HK$214 million (approx. US$27.4 million) and HK$137 million (approx. US$17.5 million), respectively.
Joy Spreader’s supply-side platform (SSP) services business was one of the star performers during the period. The business unit provides product selection services powered by data-rich and intelligence-driven profiles of online sales channels to assist sellers in choosing the most appropriate items for monetization in each channel. Joy Spreader has also been able to automate the process of acquiring fixed locations in bulk for product placements across the e-commerce platforms.
As of June 30, 2021, the number of such locations within the Group’s marketing ecosystem had climbed to 1.56 million, up 208.65 per cent from 505,945 in the same period of 2020. Of the locations, 690,000 were active, up 126.32 per cent. Averaged gross merchandise value (GMV) of the products placed during the half-year period also showed a year on year rise of 10.10 per cent to HK$3,504 (approx. US$448.50).
Demand-side platform (DSP) services also performed well. Corporate clients that subscribe to the service have access to detailed descriptions of products in tandem with intelligent forecasting services to help them choose the best locations for the marketing of the products, so they can maximize order inflow and expand their user base by relying on Joy Spreader’s Direct to Customer (DTC) model. During the first half of the year, the line-up of some 1,700 e-commerce and interactive entertainment solutions facilitated a 36.89 per cent year on year growth in the number corporate clients to 308.
Joy Spreader’s Expansion Strategy Pays off in H1 2021
With a focus on the e-commerce products marketing business, Joy Spreader has been marketing products via pre-recorded short-form videos (SFVs) since 2019, becoming one of the first companies in China to have expanded into the video-based marketing sector. The impressive performance of the business was mainly attributable to the company’s first mover advantage and top-notch marketing technologies, as well as a relatively high barrier to entry due to the steep technology requirements for new entrants into the sector.
The interim financial report also showed that Joy Spreader’s line-up of e-commerce products for marketing purposes had grown to 231. During the first half of 2021, GMV of e-commerce products rose to HK$647 million (approx. US$82.8 million), up 264.08 per cent from the same period of 2021. Revenue also increased 285 per cent to HK$129 million (approx. US$16.5 million).
The growth of the e-commerce products marketing business was attributable to the increase in the number of product placement locations made available on the highly popular Douyin platform. As of June 30, 2021, the number of such locations had grown to 657,300, a year on year gain of 720.23 per cent. With the major SFV platforms accelerating their efforts in creating a comprehensive ecosystem, the business is expected to maintain the current pace of rapid growth.
Joy Spreader’s expanded database and enhanced algorithm capacity have laid a sound foundation for the continued enhancement of the firm’s marketing business performance. Research and development expenses increased 712.5 per cent to 29.9 million yuan (approx. US$3.8 million). The company also added to its collection of data models to 169 units with 37.4 per cent increased by the end of June 30.
At the same time, to take advantage of the opportunities in e-commerce markets outside of China, Joy Spreader plans to launch SFV-based e-commerce marketing services overseas. Notably, the company has already established a business system for international markets in a move to expand its e-commerce marketing business through new media platforms with global reach including placements on TikTok.
In addition, Joy Spreader plans to provide tailor-made new media content to corporate customers by continuing to grow the number of locations for product placements as well as create its own IP content in an effort to increase first-party traffic across multiple channels. The aim is to enhance the Group’s profitability by increasing the conversion rate while further reducing traffic acquisition costs.
Given the rapidly growing market for mobile internet technologies and the changing business environment, the SFV-based e-commerce, new mobile media and social entertainment sectors that Joy Spreader has been focused on are anticipated to have promising futures both inside and outside China.
Built on its strong interim results and a forward-looking roadmap, the Group expects to continue expanding into new businesses and new markets while further consolidating its leadership in the industry, laying a solid foundation for the firm’s long-term growth.