Photo/Zhang Xiaoqing

Oct. 18 (NBD) – China's leading image-processing and social-sharing platform Meitu (01357.HK), which is on the way to make itself "Instagram of China", announced a strategic alliance Tuesday with Hong Kong-based CK Hutchison Holdings Ltd (CK Hutchison, 00001.HK) to weave beauty sales into social media.

This came just around two months after its announcement of the strategy to transform itself into a new-type social media platform.

According to the new deal, Meitu will partner with CK Hutchison's retail division A.S. Watson Group and telecom unit 3 Hong Kong in the areas of user experience, user systems, technical research and development, precision marketing, and big data. By leveraging Meitu's artificial intelligence technology and CK Hutchison's expertise in retail and telecom, the alliance is aimed at exploring a completely new business model that integrates social media with new retail.

On the one hand, Meitu's transformation is to leverage the tail wind generated by Instagram, success of which indicates enormous demand for social networking among young people. On the other hand, turning eyes to the social sector is also a way to solve the photo-editing service provider's existing problems. 

According to Meitu's financial report released in August, its monthly active users have fallen 15.9 percent from the previous year to 349.9 million as of June 30 of 2018. This is largely due to the increasingly fierce competition in the image application market and operations suspension of its video sharing platform Meipai.

In order to enhance user traffic and stickiness of its internet product and increase the potential in monetizing its internet businesses, Meitu marches into the social media sector.

Cao Lei, director of the China E-Commerce Research Center, told NBD that being a social media platform will bring Meitu tremendous data, which will not only facilitate precision ads distribution but also lead users to specific vertical businesses.

In the future, the biggest challenge awaiting Meitu is to break the monopoly of Twitter-like Sina Weibo and Tencent-backed instant messaging application WeChat in the social domain.

Email: wenqiao@nbd.com.cn