YY is one of the leading online social entertainment platforms in China. It offers users a large scale community for social interactions as well as opportunities for self-expression and achievement.
Supported by its proprietary technology and scalable infrastructure, YY has been able to grow both its revenue and profit at an extraordinary rate by drawing on its fast growing user base and expanding into new businesses. Between 2010 and 2014, the company achieved a 132% and 211% annual growth in revenue and operating profit, respectively. Since listed in November 2012, it has delivered a total shareholder return of more than 500%.
We focus on create value for our shareholders by drawing on our core capabilities and strengths.
Dominant market leadership
Since it was launched in July 2008, YY Client has accumulated a large and highly engaged user base. The addition of the mobile and web version YY in 2010 and 2012 has helped to expand it further. In 2013, YY had 87% share of the real-time online communication market in China in terms of accumulative time spent. Today, each active user on average spends approximately 48 hours on YY every month. We believe this level of user engagement is among the highest of all internet companies in China, which creates high barriers to entry for potential competitors.
The more users use YY, the more diverse and vibrant our social ecosystem becomes, and the greater the value of platform to our users and partners. This network effect encourages loyalty among our existing users and incentivizes them to promote it to new users, resulting in more channels and activities being created. This in turn leads to greater user engagement and a thriving online social ecosystem. The total number of registered accounts and average monthly active users grew more than 60% and 35%, respectively, in each year between 2010 and 2014, which was achieved from viral network affects, with minimal sales and marketing efforts.
Scalable platform for potential end markets
The open architecture of the YY platform allows our users to create, expand and develop novel ways to utilise the platform. Because YY Client was originally intended to facilitate real-time communications among online gamers, we historically relied more on online games and advertising revenues. Since the monetisation of the music business in March 2011, we have been actively diversifying our business into new and high growth categories by developing and promoting products and services that address specific end markets.
Proprietary technology infrastructure
We have invested significant resources in developing and maintaining our proprietary technology to support our business and future growth. The proprietary technology ensures high quality service characterised by high fidelity delivery of large amounts of voice and video data to millions of concurrent users in China. Our scalable architecture consists of cloud-based server infrastructure and our proprietary routing algorithms that automatically detect the fastest and best way to deliver data packets in ‘a low latency, low jittery and no crash’ basis.