China’s online social networking market is expected to grow from just RMB175 million last year to RMB1.2 billion by 2010.  With 11% of the market, Marry5.com is hoping to grow in step, and encroach on the market share of competitors. Ken Wu, the CEO of Marry5.com’s parent company Shenzhen Haotian Group, tells Amy Cheung of The China Perspective about the company’s expansion plans.

The China Perspective: According to the 2006 China Online Social Networking Research Report, released by iResearch, China's online social-networking market reached RMB175 million in 2006, up 169.2% year-on-year. What is your current share of the market?
Ken Wu: The continuous increase in the number of single white collar workers and their rising consumption power is driving the exploding dating market. We believe China has the potential to develop into a mature market like Japan and the US, with a high degree of urbanization and a large number of singles. In the future, we believe there will be two to three leading industry players in the market and we are optimistic that Marry5.com can secure one of the top spots. With 5 million registered users, our current share of the online dating market is around 11. We expect this to grow to 15-30%.

Marry5.com’s business philosophy is similar to that of Match.com and eHarmony.com. Instead of quantity, we focus on the quality of our client base. We target high-end white collar workers with high purchasing power and the willingness to pay for professional services.

TCP: Marry5.com stirred the industry earlier with profitable fiscal reports. What is the key to your profitability, and what is your forecast for this year and next?
KW: At the macro level, China has become the second largest Internet community in the world, providing a solid foundation for online dating service providers. Moreover, there is still no leading or widely recognized online dating website, offering us room for further investment and expansion in this regard.

Marry5.com has a clear market positioning, offering both online and offline professional services. We have invested in creating and developing products to form the backbone of our charged and VIP services. Our management expect that Marry5.com will generate RMB5 million in revenues per month in 2007, and will grow further in 2008. Whether or not we can complete an IPO will also affect our revenue and profit margins.

TCP: What is your plan for further expanding your subscriber base and the scope of your dating services?
KW: There are cultural differences and differences in consumer behavior across mainland cities. Therefore, we have marketing teams in each city to publicize Marry5.com. We also plan to expand to overseas Chinese communities. We plan to expand to Hong Kong in August 2007, although it is not yet confirmed since we still need to evaluate the costs. However, it is very likely we will land in Hong Kong this summer. Hong Kong strikes us as key market because official statistics show that 20% of Hong Kong’s newlyweds are Hong Kong-mainland parings.

However, we will not neglect the need to maintain our existing user base. We will still continue to improve our current services and organize events and offline networking parties. We understand the importance of winning consumers with improved and more personalized services. Only in this way can we raise our profit margins.

TCP: Do Chinese online dating services users have any unique characteristics? How does Marry5.com tailor your services to better attract mainland users?
KW: Compared with developed countries, the Internet is not yet very common in the mainland, and netizens in China are generally younger. Secondly, China’s online payment system, the popularity of e-commerce and the use of credit cards are not as established as in developed countries. However, with the increased popularity and use of online payment systems, we expect online dating websites will see further growth.

We have been cooperating  and conducting research with mainland academic institutions such as Nankai University and the Chinese Psychological Association to understand Chinese consumer psychology and behavior. Based on these statistics and findings, we know we can’t directly copy overseas online dating products or services. We have tailored our dating services to suit mainland consumer needs, though our approach shares many similarities with the approach of eHarmony.com.

TCP: You have recently reached a partnership agreement with MSN? What does that mean for Marry5.com, and are you looking to extend your cooperation further?
KW: In order to grow further in China’s online dating market, we need to gain access to more valuable user information. The partnership with MSN enables us to do that. MSN positions itself as a high-end information platform for mainland white collar workers, which is similar to Marry5.com’s positioning as the online dating services provider for 25- to 40-year-old white collar workers. This consumer segment demonstrates high purchasing power and a willingness to “pay for love”. Therefore, both parties have a high expectation for further cooperation. The potential for vertical and comprehensive website development creates a win-win situation for both.

TCP: You are planning to raise capital through an IPO. Can you tell me more about that?
KW: In addition to the need to raise capital to support business development, our management believes an IPO can ensure returns for our investors. It is also an efficient device to ensure sustainable development. Our primary plan is to go for an overseas listing, but given the positive development of mainland capital market, we do not exclude the possibility of listing on a mainland stock exchange.

TCP: Marry5.com received investment from Softbank Asia in 2005. How has this helped the company? Are you looking to other possibilities for cooperation with or investment from venture capitalists?
KW: We received US$12 million from Softbank Asia, which was used for website operation and maintenance, marketing and brand building, plus mergers and acquisition of small and midsize websites and companies. We are flexible and open to cooperation with venture capitalists and private equity funds. At the same time, we are actively pushing for the completion of our IPO to access funds from the capital markets.