Inside Jiayuan (NASDAQ: DATE) -By iChinaStock

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iChinaStock.com profiles Chinese firms that are publicly-listed or may list soon in overseas markets

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© March 2011 iChinaStock

NASDAQ: DATE

JIAYUAN

A LEADING CHINESE ONLINE-DATING SITE

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SUMMARY

  Jiayuan is a leading online dating site in China. It operates a freemium model whereby users can start browsing for free, but must pay for premium services such as messages, badges, and targeted searches.   iResearch reports that Jiayuan generates 44% of revenues in China’s online dating market.

  At the midpoint of its IPO range, Jiayuan would raise $78 million at a $344 million valuation. It plans to list on NASDAQ on May 11, 2011 under the ticker DATE.

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REGISTERED USERS

Source: JiaYuan.com. F-1 SEC Filing

iResearch ranked Jiayuan.com as #1 among Chinese dating sites in terms of number of visits from unique IPs, avg. time spent per user, and avg. page views per user.

12,702,855

19,243,134

35,090,025

40,156,311

2008 2009 2010 2011 (As of March 31)

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AVG MONTHLY USERS ��(ACTIVE AND PAYING)


2.51

3.69

4.20 4.40

4.74

0.17 0.19 0.21 0.24 0.31 0.50 0.65 0.76 0.88

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Ac/ve Users

Paying Users

Millions

Note: *Active user accounts refer to registered user accounts through which registered users have logged-in to our Jiayuan.com website at least once within a calendar month in the case of user accounts registered in prior months, or on at least two separate days within a calendar month, including the day of completion of the registration process, in the case of user accounts newly registered in the calendar month.

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USER DEMOGRAPHICS

“Leveraging our brand and national recognition, we have attracted a critical user mass locally in not only first-tier cities, such as Beijing, Shanghai, Guangzhou and Shenzhen, but also in many second-tier cities across China. We intend to continue expanding our user base into other second-tier and third-tier cities.”

Jiayuan users are serious: “We actively discourage users who are not looking for a serious relationship from using our services.”

Jiayuan users are urban:

There are also concerns that some percentage of Jiayuan users are fake. Local Chinese press has picked up on a number of such accounts, though it is also possible that Jiayuan’s competitors are attempting to disparage the site.


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REVENUES


4.25

9.83

25.78

-2.13

0.87 2.57

-2.11

1.12 3.64

-‐5

0

5

10

15

20

25

30

2008 2009 2010

Net Revenues

Net Income (Loss)

Adjusted Net Income (non-‐GAAP)

Millions USD

Note: Adjusted net income accounts for stock-based compensation and certain other non-cash costs. It is the basis upon which many investors appraise companies filing for listing.

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FREEMIUM MODEL

“Although the search capabilities and exploratory services are provided for free and our users are not required to pay to send an initial message to another user, either the sender or recipient must purchase a RMB 2.00 virtual stamp in order for the message to be readable. After the initial message is read, future communications between the same users are free on Jiayuan.com. Our pricing strategy for the initial message is designed to reach and target the mass market with its affordability.”

Jiayuan operates a freemium model whereby users can start browsing for free, but must pay for premium services such as messages and virtual gifts.

There are also various monthly subscription plans that allow users to send up to 100 initial readable messages per day.

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REVENUE SOURCES (2010)

Source: Jiayuan.com F-1 SEC Filing

• “Net revenue from this sec/on primarily consist of ini/al message fees, subscrip/on fees, and value-‐added services (i.e. virtual giQs, improved search rankings, IM service, and advanced memberships. Messages services alone accounted for 84.2% of net revenues in 2010.”

Online Services 90% of revenues

• Jiayuan hosts an average of 670 large scale social gatherings per year to promote its brand and provide users opportuni/es to meet in person in ci/es across China.

• Jiayuan provides “special, personalized services” for our VIP clients to find companions.

Events & VIP Services 5% of revenues

•  “Other services revenue consists primarily of adver/sing revenues. Adver/sing revenues are principally derived from online adver/sing arrangements.”

• In Oct. 2010, Jiayuan also launched a new wedding and event planning website Xique.com.

• Accounted for 5% of revenues in 2010

Other Services (ads) 5% of revenues

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REVENUE BREAKDOWN

Source: JiaYuan.com F-1 SEC Filing

Online Services

90%

Events & VIP

Services 5%

Other Services

5%

$2,414,100

$1,194,735 $643,780

$6,986,915

$1,970,597 878,386

$20,312,000

$3,980,000

$1,100,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Online Services Events & VIP Services

Other Services

2008 2009 2010

By Revenue Share (2010)

By Net Revenues

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COMPETITORS

“Our principal competitors include Baihe.com and Zhenai.com, both of which operate online dating platforms. In addition, we face competition from Internet portals such as Sina.com.cn, Sohu.com, QQ.com and 163.com and social networking websites such as Renren.com and Kaixin001.com, each of which provide various online services or platforms that could be used to deliver dating services.”

As compared to other dating sites, Jiayuan places more focus on online activity and interaction between users. Jiayuan’s competitors include both dedicated dating sites and web portals:

Zhenai operates an online-offline hybrid site that combines a website with a large call center. The site serves in large part to upsell users to Zhenai’s matchmaking services which run for about RMB 3000 (450

USD). The call center employees then offer personalized service to find the customer a match. Zhenai has run aggressive advertising campaigns

across China to gain audience.

Baihe is an dating site that organizes lots of offline activities. The focus is on “VIP” members who pay a high fee to be introduced to potential

matches. Baihe has fallen behind Zhenai in name recognition as that site has increased its marketing efforts.


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INDUSTRY GROWTH

Source: JiaYuan. F-1 SEC Filing

1.  Unprecedented urbanization 2.  Rapid demographic changes, including a growing gender imbalance 3.  China's unique cultural considerations and traditional values 4.  China's fast growing Internet industry.

Jiayuan cites four key factors driving growth in China’s online dating sector:

“According to iResearch, the number of singles over the age of 18 visiting online dating websites increased from 14 million in 2009 to 19 million in 2010 and is expected to reach 60 million in 2015.”

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Search

Log-in

Register

Jiayuan Homepage

Ads for offline activities and TV

shows

New users

Log-in

Pink theme of site pleases many female users

Buy stamps (required to send

messages)

Account Page

One free stamp (upon registration)

Profile % complete

Gifts

Msgs in inbox

Payment Page Payment methods include online banking, credit card, phone credit, phone charge

cards, Alipay, and more Stamps costs 2RMB each (the alterative is buying a monthly subscription plan)

Messaging (stamps) account for 84% of Jiayuan’s net revenues

Search Page

Searching for you

Quick Search

Location / gender

Age

Height

Other criteria include educational background,

constellation sign, Chinese horoscope, blood type,

income, etc.

Browsing is free, but an initial message

requires one stamp (2rmb)

Profile Page

Message User Send Greeting (wink)

Similar users

Profile info

Messaging System

Profile info

Use a Jiayuan stamp Send free msg

If a stamp is used, recipient can read the message for free. If a free message is sent, the recipient must use a stamp (2rmb) to read the message.

After the initial message, all subsequent messages between the two users are free.

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IPO STATUS

•  Jiayuan plans to list on NASDAQ on May 11, 2011 under the ticker DATE.

•  At the midpoint of its IPO range, Jiayuan would raise $78 million at a $344 million valuation.

•  Underwriters on the IPO are being led by Bank of America Merrill Lynch and Citi.

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OFFICIAL STRUCTURE (OUTSIDE CHINA)


Anticipated shareholder structure

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OFFICIAL STRUCTURE (INSIDE CHINA)

Source: JiaYuan.com. F-1 SEC Filing Anticipated shareholder structure

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ABOUT ICHINASTOCK

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© March 2011 iChinaStock

Technology

Inside Jiayuan (NASDAQ: DATE) -By iChinaStock