On 10th Nov., Yalla Group released its Q3 2020 financial report. According to the financial report, Yalla Group is in good condition, with rapid growth of operating revenue, growing Yalla Ludo and sufficient cash flow reserves. However, it faces problems such as sluggish growth of paying users, declining growth rate of MAU and reduced ARPU value.

Overall, though, Yalla Group's first earnings report is sufficient to satisfy the secondary market, with Yalla shares up 12% to $11.53, giving it a market value of $1.651 billion.

With high revenue growth, Yalla Ludo gets the baton

According to the financial report data, Yalla Group Q3 had a total revenue of 33.8 million US dollars, up to 90.4% compared to the same year, including chat service revenue of 30.3 million US dollars and game service revenue of 3.5 million US dollars. Because Yalla Ludo added a voice broadcast room, it is hard to tell how much the two main products contribute to the revenue.

According to its official statement, the main reasons for the revenue growth are as follows: (1) Yalla and Yalla Ludo’s MAU growth was significant; (2) The total number of paying users increased; (3) Yalla Ludo’s monetization capability increased.

Combined with the statement of Yalla Ludo’s financial statement “the monetization ability of Yalla Ludo has been significantly increased”, the data of App Annie, and the slight decline of Yalla’s paying users conditions, two conclusions can be drawn roughly: one is that Yalla Ludo’s ARPPU is improving; the other is that Yalla Ludo’s ARPPU will become the threshold of Top30 manufacturers with monthly revenue of tens of millions of dollars.

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There is another thing which needs to be noticed that Yalla Ludo is not the only Yalla Group in terms of revenue growth.

Although in Yalla Group’s financial report there didn’t mention the product called “YOYO”, YOYO is likely to become an important part of the Yalla Group’s product matrix, judging by the changes in YOYO’s ranking and the amount of advertising he has done on Facebook since May. In fact, this product has been on the market since 2018. After Yalla’s main App gained the top position in the market, it is obvious that Yalla Group has turned over this old product and is trying a new method.

In addition to having voice chat like Yalla, YOYO also supports one-on-one voice or video chat, which makes YOYO an extensive entertainment App as well as a dating App. And YOYO does want to distinguish itself from Yalla in terms of its UI design and social connections.

YOYO’s page design is quite simple, mainly with white as the background, purple as the auxiliary and yellow as the matching colour. All the colours selected are the favourite colours of the Arab nation, while other colours are rare. In addition, YOYO only has three first-level menus of live Match, message and home page, and no complex gameplay such as families, guardians, and levels, so the threshold for use is relatively low. YOYO is currently in the Top100 for non-game apps on Google Play in eight countries, including Kuwait and Qatar, and occasionally in Saudi Arabia.

Whether YOYO will become another growing engine for Yalla Group in the future remains to be seen. Another interesting thing is that YOYO and Yalla’s direct competition with the same name as YOYO, another voice chat App, will also save some keyword purchasing costs. Whether this is a coincidence, or a deliberate choice is unclear.

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In addition, in addition to searching for new product growth engine, Yalla Group seems to be also intends to expand its own strategic market, over the past few years Yalla Group, deep in the Middle East market and in the crowded social entertainment track in the Middle East became a social Middle East first crossed the line first, but in the future Yalla Group wants to be more valuable social stocks, it is not enough to only satisfy customers in the Middle East.

At this stage, in addition to YOYO appearing in the Top100 of non-game apps on Google Play in Italy, referring to the European market, Yalla Group appears to be interested in its Middle East neighbour, Pakistan. In addition to hiring in Arabic, Indonesian and Turkish, the Yalla Group is also looking for talent in Urdu, the national language of Pakistan, according to recruitment data from Boss Direct Recruitment by Hangzhou-based company Yalla Technology. Pakistan is a typical emerging market, but Tinder’s ban and the absence of a head-dating App is a big temptation. But avoiding the same problems as Tinder encountered is also a problem the Yalla Group needs to solve.