In January, Charles Li, Chief Executive of the Hong Kong Exchanges and
Clearing Limited (HKEx), announced the most important reform of the
city’s listing system in 25 years. In the end of 2018, we are going to
see the glorious achievements of the Hong Kong market. According to the
performance report of the first three quarters of 2018, HKEx realized
revenue and other income of HKD 12.296 billion with a net profit of HKD
7.484 billion in the first three quarters of 2018, increasing by 27% and
35% compared with last year respectively. HKEx continues to play the
role of a global IPO hub and Asia’s most active and liquid capital
We have seen unicorn enterprises rushing to the stage of HKEx at a faster speed. Babytree, which has been established for 11 years, is the market leader for the parenting online community. Meituan Dianping, which has been established for 8 years, is the market leader for catering platforms. Xiaomi, which was founded 7 years ago, has earned revenues of more than 100 billionRMB. In this December, Wanka Online, the new economic unicorn which is also the first in the Android ecosystem, will be giving its debut. The intensive listing of mainland emerging economy companies in Hong Kong has attracted a lot of attention in the capital market of Hong Kong in 2018.
According to its official website, Wanka Online’s business is utilizing artificial intelligence and big data capacity to provide mobile advertising service for the clients, technical support for developers, and to push for technical standards for the Mobile Hardcore Alliance and the Quick App Alliance that was formed later. Wanka Online has only taken 4 years to break through the critical point of scale effect, achieving tremendous growth, and has rapidly completed the process of reaching the open market from a start-up unicorn.
Embracing the long-term revenue harvest
The Internet is a miracle industry, there is no fastest only faster. In traditional industries, four years is just enough for start-ups to find their niche and be comparatively stable in the industry. For Wanka Online, it has not only established the android platform ecology in four years, but also realized rapid growth and achieved profitability.
The era of smartphones, led by Apple and Xiaomi of China, has profoundly changed the business logic of the mobile phone industry. It has also become the consensus of the industry to develop non-hardware business, which revenue mainly includes e-commerce, advertising, distribution and games. To achieve growth in the non-hardware business, the first problem that needs to be solved is the decentralization of the Android operating system. Unlike Apple, the Android operating system allows smartphone manufacturers to customize their own operating systems. However, there are differences in the operating systems of various mobile phone brands, leading to problems such as a lack of platform standards and inefficient distribution.
In 2014, CEO of Wanka Online Gao Dinan keenly captured this opportunity and established the Mobile Hardcore Alliance to promote a standardized platform for distribution and development and a sales and marketing channel, and to raise the efficiency of developers. The alliance also provides users with better contents and improves the user experience. It has not only been a strong push to the mobile Internet revenue growth for mobile phone manufacturers but also realized an all-win situation for mobile phone manufacturers, developers and users.
Data shows that in 2017, the mobile advertising market scale of domestic smartphone manufacturers increased from RMB 15.4 billion in 2013 to RMB 217.2 billion in 2017, with a compound annual growth rate of 93.7%. Advertising service revenue accounted for 49.1% of the total post-sales revenue, and value-added services such as the publication and distribution of mobile apps and mobile games, sales of online storage, and cloud services accounted for 29.3% of the total post-sales revenue.
The only survival guide in the Internet circles is speed and Wanka Online understands this principle very well. The company’s annual revenue was RMB 15.29 million in 2015, RMB 40.55 million in 2016, RMB 486 million in 2017 and RMB 670 million for the first half of 2018, reflecting a Year-on-Year growth of more than 11 times and a growth rate of 445%
Once the Internet business model survives the losses in the initial stage, it will start to make profits continuously. BAT and other Internet giants are no exception.
Expanding “friend zone” and enlarging “business circle”
The development secret of Wanka Online is: expanding “friend zone” and enlarging “business circle”. Gao Dinan, founder of Wanka Online, once said, “what we insist on is bringing new increment of Internet to android phones and providing value-added services on the original basis”. In terms of service advertisers, mobile application developers and smartphone manufacturers, Wanka Online has established two “Friend Zones”: the Mobile Hardcore Alliance and the Quick App Alliance.
The Mobile Hardcore Alliance has become one of the most influential platforms in the mobile Internet industry, and has worked with mobile phone manufacturers to establish an ecosystem and promoted platform standards. Domestic smartphone giants such as Huawei, OPPO and vivo are also the members of the alliance. According to the prospectus, Mobile Hardcore Alliance manufacturers produced 62.1%, 275.8 million units, of the domestic shipments in 2017 and are expected to reach 322 million units in 2022.
At the same time, Wanka Online has also promoted the establishment of Quick App Alliance which is formed by Huawei, Xiaomi, OPPO, vivo, Lenovo and others to provided standardized tools via a unified platform. Since Quick App is a new product form, standardization is the basic condition for its growth. Mobile phone manufacturers should have a long-term strategic plan to implement Quick App on the eve of 5G. Quick App alliance accounted for 75.8% of China’s smartphone market in 2017 and is expected to reach 86.2% in 2022.
These dynamic “friend zones” has boosted up the “business circles”, Wanka Online has achieved cooperation with Internet giants, including Tencent, Baidu, JD, Netease and Toutiao. The rapid growth of the company’s revenue is the result of the continuous expansion and deepening of the business circle.
Wanka Online to focus on A.I. in light of expanding Android operations in the 5G era
On November 22, Xiaomi President Lin Bin sent out the first Weibo post under the 5G network. According to open data, the first half of 2019 will embrace a burst of 5G Android phones. Huawei, Samsung, vivo, Oppo, Lenovo will focus on the release of more 5G phones. As for the IOS camp, the 5G iPhone will not be released until 2020.
Supported by new technologies, android will speed up the compression of the IOS market and expand its own territory. According to IDC data, the market share of Apple’s iPhone is decreasing rapidly, from 19% of last year to 13.2% in the third quarter of this year. Judging from the long-term trend, Huawei of the Android camp has sold more than Apple for two consecutive quarters, with an increasing rate higher than that of Apple’s for three years.
IDC expects Android phones to account for about 85% of global sales this year. Android smartphones will dominate China in five years, with sales expected to grow at a compound annual rate of 2.4 % to 1.41 billion by 2022. This is expected for future expansion of Wanka Online, which reaches more than 90% of Android phone users.
In the era of 5G, further integration of online and offline is needed and we need to better understand users. Artificial Intelligence is the present, as well as the future. Wanka Online has its own-developed artificial intelligence platform DAPG. According to the prospectus, 30% of the proceeds raised will be invested in the research and development of artificial intelligence. Following the pace of 5G, the company will continue to nurture and build android mobile Internet system and create more beneficial value for all parties involved in the ecology.
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