Bilibili Inc. (NASDAQ:BILI) Q2 2023 Earnings Call Transcript

The one vertical is referring to the six customized industry app models, including games, e-commerce, FMCG, automotive and Internet service; among which, e-commerce and games starting to show very positive results. In the second quarter, ad revenue from e-commerce industry grew by over 140% year-on-year and game — and advertising revenue from game industry grew by over 40% year-on-year. The second reason is that since last year, we have sticked to the integration of content and commercialization and expand ad inventory in different scenes of the community on the basis of ensuring user experience. In the first half of this year, it has formed very good growth momentum and drove the accelerator at revenue growth. Thirdly is that you — many of you probably already aware that we have established the trading ecosystem center to focus on building video e-commerce-related capability in the second quarter by integrating the transactional scenario into the advertising products to further boost the revenue growth.

We expect the video e-commerce-related ads would generate about 10% to 15% of ad revenue this year. And in the next few months, we also plan to upgrade the membership shopping [Foreign Language] on our main page to [Foreign Language] shopping tab and creating a new entrance for more commercial opportunities. As for the June 18 period promotions, how we performed, through our in-depth data collaboration with e-commerce platform, the revenue of the e-commerce industry — ad revenue from e-commerce industry, including transaction scenario during June 18 period actually grew by 200% year-over-year. And we expect to achieve 15% to 16% ad revenue year-on-year increase from e-commerce industry during upcoming Double 11 festival. As for examples, we actually did a collaboration with Alibaba’s Spark program, aka [Foreign Language], and the results exceeded our expectations.

There are a few interesting data points I can introduce. About 70% of the users who entered Taobao through Bilibili were new customers, and this ratio reached even to 90% for certain industry. That shows that we have the effective ability to consistently convert user to — [for advertisers] (ph). In addition, Bilibili user maintained a very high conversion value 15 days after the related video was posted. And during June 18 period, the ad revenue from Alibaba actually increased by 300% year-over-year. While many other content platforms choose to build their own e-commerce platforms, Bilibili, on the other hand, we choose to take an open approach, partnering with e-commerce players and brand owners to grow the sales volume together on Bilibili.

First of all, cultivating users’ consumption behavior and mindshare on Bilibili is our top priority. We believe that the young generation has strong willing to consume, and building mindshare is very important as we unleash their consumption power on our platform. In the first half of this year, nearly 30 million users clicked on the shopping link on Bilibili’s video commentary section, which leaded to a transaction-related behavior. As we unleashing our user consumption demand, the number of videos that carries product links increased by 8 times in the first half of this year, and the number of live broadcasting e-commerce shows increased by 7 times in the first half of this year. Secondly, we will continue to help our content creator to achieve sustainable operations through our video e-commerce initiatives.

More content creator already started to try out Bilibili video e-commerce. This includes, but not limited to many well-known content creators such as [indiscernible] and et cetera. We are very delighted to find the model is very valid and successful, and this also broke the rumor that Bilibili’s user have no consumption power. And actually, as a matter of fact, from the data that’s shown that we have a lot of female users with consumption potential and power. Actually, 45% of Bilibili’s users are female. We do notice that they are — they do have strong willingness to consume on Bilibili and they have strong purchasing power. Thirdly is that we intend to try more categories from our — on top of our traditional strong verticals, in addition to the IP derivative, aka our membership shopping, which is focused on the ACG preferential products and content.