Those who have been following Vulcan Post or the Singapore startup scene would be familiar with dating app Paktor. We have covered and followed what they have been up to for a while now. Paktor has recently been actively acquiring users around in Southeast Asia. You might have came across one of its recent marketing video:
Marketing aside, here’s why personally I am excited about Paktor:
The Dating Industry Is A Multi Billion Dollar Business
Let’s look at the macro picture first: All of us know this, one of the oldest industries for mankind is dating and relationship. The dating industry has evolved from physical matchmaking in the old days, to online dating site, and recently towards mobile. According to MarketResearch.com, online dating is a now a $2.1 billion business in the U.S alone. Another study by PEWResearch also states that one-in-five adults ages 25-34 years old have used online dating.
That is a lot of people.
If we take a look at Tinder, one of the biggest mobile dating app in the United States, the application makes 21 million matches in the United States, compare that to the fact that there are only 70,000 bars and nightclub in the United States and and you can see how dating is changing and moving towards mobile. This opens up a lot of potential revenue opportunities for brands.
Paktor, which is the Tinder for Asia, is in a similar position to leverage on this multi billion-dollar industry. It currently has over 1 million users in Southeast Asia and is matching over 100,000 people with one another per day through its mobile app.
Eric Schmidt, Executive Chairman of Google, once stated, “If you don’t have a mobile strategy, you don’t have a future strategy.” Multiple research firms have also advocated that mobile is going to continue growing and especially in Asia, several countries are also a mobile first country where consumers access the internet for the first time using mobile.
What this means is that consumers increasingly will spend more time and money on mobile.
The predominantly desktop first online dating industry is now slowly shifting towards mobile, and Paktor is in the best position to capitalize on this.
Potential for new suite of products
Another hidden potential of Paktor lies in that with its strong user base, it can easily expand into other new suite of products.
Market leaders in the online dating space such as Chinese listed company Jiayuan, which started as a dating site, is now moving towards physical match making. Since its inception over ten years ago, Jiayuan has enabled 12.3 million successful matches in China.
Its CEO Mr. Linguang Wu recently also commented, “Looking to the future, we will continue to build upon this massive database of marriage minded singles by integrating it with our proprietary CRM system in an effort to consolidate the traditional matchmaking business in China which we believe is poised for a period of explosive growth. 2014 is an important year for us strategically as we make investments in our database of eligible singles to generate new revenue streams and ensure the long-term sustainability of our business.”
Similarly, one of the world’s largest dating site Match.com has recently tied up with Three Day Rule to focus more on physical match making after acquiring most of the customers database.
As one of Southeast Asia’s largest mobile dating platform, there are various opportunities for Paktor to explore various revenue opportunities, especially in the physical matchmaking space.
In November last year too, Paktor has organized the world’s largest speed dating event ever in Ho Chi Minh City, Vietnam, breaking the Guinness World Record. This proved that there is a strong demand for physical matchmaking, thereby more rooms for revenue growth for the company.
For any marketplaces, liquidity is a critical element other than your typical supply and demand equation. Liquidity is the reasonable expectation of selling something you list or finding what you’re looking for. In Greylock Partners’ Simon Rothman’s words,
Liquidity isn’t the most important thing. It’s the only thing. Until you reach liquidity, you’re vulnerable. After, you have the opportunity for dominance. The first marketplace to reach liquidity wins.
Does Paktor has it? Definitely. During the first two weeks of 2014, Paktor has matched a total of a quarter of a million people on its app. That is a lot of matches. We would assume that Paktor would have a high matching ratio now that is has grown over the past few months. According to Paktor, it is currently matching over 100,000 people a day now and its user base and activity is growing by 50-100% monthly. It claims that it is the dating app leader in Singapore, Vietnam, Malaysia and Thailand, and coming in close second behind top player iPart (10 years in the industry) in Taiwan. The next better player in SE Asia is coming in at less than a tenth of Paktor’s user activity and growth.
Team and speed of execution
Another reason why I am bullish about Paktor is of course, the team. The team has high execution speed: in less than a year, other than breaking one Guinness World Record by organizing the largest speed dating event in Vietnam, it has also established presence all around Southeast Asia, especially in Thailand, Singapore and Malaysia. The founding team comes from a diverse industry background ranging from banking, consultancy, marketing and technical development.
How they are doing now?
How is Paktor doing now? While the company has not shared any recent revenue growth or any future plans, what we do know is this:
- Paktor has just rolled out its first revenue model: by allowing users to purchase credits. Credits enable users to connect directly with one another.
- There are huge potential for other revenue channels such as physical matchmaking
- High liquidity with many successful matches per day
- There are no clear leaders in the mobile dating space yet in Singapore, or Southeast Asia
- Paktor has a team that executes fast on its vision.
So should investors and users take a more serious look at Paktor? Definitely.