Moet Match zich zorgen maken over het vertragen van de groei bij datingapp-gebruikers?

Moet Match zich zorgen maken over het vertragen van de groei bij datingapp-gebruikers?

augustus 22, 2019 0 Door admin

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The premier online dating site may have been too successful for its own good.

Rich Duprey

Is Match Group (NASDAQ:MTCH) about to become a victim of its own success? Because it owns virtually the entire dating app space (including four of the top five apps on the market), Match may soon run into the brick wall of oversaturation.

Data from eMarketer now expects the growth in the number of dating app users to significantly slow over the next few years. Where eMarketer had previously expected growth to rise almost 10% annually and hit over 36 million users by 2022, it has dramatically reduced that outlook, cutting its forecast growth rates nearly in half. It now expects the number of app users to reach just 28.1 million, or a growth rate of just 5.3% a year.

Hearts escaping a smiling woman's phone

Image source: Getty Images.

As recently as 2016, dating-app user growth was in excess of 32%, but it has now dropped to the low single digits. The most popular apps see slowing growth, with users switching between apps rather than downloading new ones — and the dating sites being successful in pairing people up.

But eMarketer remains encouraged by the data because — from a marketing standpoint — it shows the space is still growing, telling advertisers they shouldn’t abandon dating apps as they will remain lucrative. Match investors may view it differently, however.

Growing at a slower pace

Underscoring the survey’s findings, Match revenue growth is slowing. It was up 14% in the first quarter, and analysts expect it to grow 16% in the second, but that’s down sharply from last year, when revenues soared 36% in both corresponding quarters.

The reason behind the slowdown is slowing user growth. The average number of subscribers in the first quarter this year rose 16% to 8.6 million, but last year it was up 26%. Because Match is the industry leader with Tinder, Match, OKCupid, PlentyOfFish, and Hinge as part of its retinue, its growth rates may not contract as sharply or fall as low as the marketing data indicates. But revenue may stall sooner rather than later.

Certainly Match is angling to limit the downside risk of this, adding more premium content to its subscriptions to encourage users to pay up for more functionality, while also expanding internationally. For example, it realigned its leadership team to take advantage of what it sees as a big opportunity in the Asia Pacific region by relying more heavily on both Tinder and Hinge, one of the emerging properties it acquired last year.

An international love affair

Direct revenue overseas jumped 19% last quarter, driven by a large 23% gain in subscribers, offset by a 3% decline in average revenue per user. Hinge in particular is posting significant growth, with global app downloads up 32% sequentially. But Match also has smaller apps like Chipsa targeting the Hispanic community and BLK targeting African-Americans. 

Ship is another new app, launched in January, that relies upon social engagement with users inviting friends to the platform to pick potential dates for them. Match says 60% to 70% of users are female.

While Match is breaking down its users based on various criteria and really trying to segment them, the eMarketer data suggests that rather than more new users coming to the platform, users are instead simply switching between apps, suggesting a saturation point may have been reached. And because Match and others may be doing a better job of successfully pairing users in long-term relationships, they may need to use the app less.

Still a more muted outlook

Given the growing global population, finding a partner online no longer carries the stigma it had when meeting a partner on AOL was seen as embarrassing. An increasingly interconnected world population indicates online dating app usage should still grow. Match investors, though, can probably forget about the heady days of the recent past. 

Match Group, like online dating itself, has grown and matured, so a different outlook as to how its stock can grow will be needed. International markets can still fuel expansion, but with Match’s stock trading near all-time highs, there may be more downside risk ahead than upside potential.

  Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Match Group. The Motley Fool has a disclosure policy.”>

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