[Photo/taken by Tan Yuhan at Chengdu IFS Meitu flagship store]

It's been four years since Meitu, company behind the viral selfie application, released its first phones in 2013. To youngsters, the Meitu phone has been known as an android phone for taking selfies. However, with increasing competition from it rivals with selfie as a selling point, Meitu is gradually losing its advantages. 

According to the report released by a market research company Counterpoint, Huawei, OPPO, vivi, Xiaomi are the top 4 manufactures by market share in the second quarter in China, accounting for 69% of the total. Apple and Samsung took the fifth and sixth place. That leaves Meitu to compete with phone makers including GIONEE and Meizu for less than 20% market share left.

Hard to sustain with only "one trick"

Meitu is best known for its "auto-editing functions" when taking photos. But the NBD reporter noticed that other domestic brands are also giving big push to smartphones with higher-resolutions. For instance, Huawei teamed up with Leica to offer better shots. OPPO also unveiled R11 with dual 20MP cameras this June. Besides, GIONEE took the lead to lunch S10 with 4 cameras (dual primary camera + dual selfie camera).

It is hard for Meitu to outdo Huawei, OPPO and vivo no matter in terms of R&D, supply chain, or marketing. As of Aug 12, the best-selling Metitu selfie phone is T8 on JD.com, which is priced at 3799 yuan (569.66 U.S. dollars). But the price is high when compared with that offered by its rivals.

Over 90% revenue comes from phone sales

Meitu's photo-editing App has attracted 450 million active users monthly, whereas Meitu has a difficult time to gain profits. Public documents reveal that Meitu keeps losing money during 2013-2015. Though it went public in HK in 2016, yet it still didn't do very well.

Awkwardly 90% revenue of Meitu, an internet company, comes from its smartphone sales. In 2016, revenue from Meitu hardware devices grew 120.9% year over year to stand at 1.474 billion yuan (221.03 million U.S. dollars), accounting for 93.35% of the total.

From 2013 to 2016, altogether 1.44 million units of Meitu smartphones are sold, about 350,000 units each year. It seems that Meitu didn't find a way to convert its ample user base into profits. Selling only 350,000 smartphones each year is not enough to support the whole company.

Wang Yanhui, secretary-general of Mobile China Alliance, says that Meitu selfie smartphone can meet the demand of some customers. Based on that, Meitu should pursue profit margin instead of seeking phone sales volume alone.

Email: tanyuhan@nbd.com.cn