Good day, and welcome to the Bilibili 2021 fourth quarter and full year financial results and business updates call. Today's conference is being recorded at this time. I would like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. Please go ahead.
Thank you, operator. During this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties, including those mentioned in our most recent filing with the SEC and Hong Kong Stock Exchange. The non-GAAP financial measures that we provide are for comparison purposes only. Definitions of these measures and our reconciliation table are available in today's news release we issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the Bilibili IR website at ir.bilibili.com. Joining us today from Bilibili Senior Management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer, Ms.
Carly Li, Vice Chairwoman of the Board and Chief Operating Officer, and Mr. Xin Fan, Chief Financial Officer. I will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen.
Thank you, Juliet, and thank you everyone for participating in our 2021 first quarter results conference call. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen. Growth remained the key word for Bilibili throughout the year of 2021. In the fourth quarter, our MAUs rose to 272 million, and mobile MAUs rose to 252 million, each representing a 35% increase year-over-year, making us one of the fastest growth companies in China's internet space. At the same time, average daily time spent on our platform rose to 82 minutes, with DAUs reaching 72 million in Q4, 34% more than the same period in 2020. In fact, we have more than doubled our MAUs in the past three years, far outpacing the industry growth rate. This is no small feat.
Importantly, our expanding user scale translated to top line expansion with consistent quarterly growth in 2021. For the fourth quarter, our total revenues reached another record high of RMB 5.8 billion, up 51% year-over-year, and our full year revenues grew by 62% to RMB 19.4 billion. MPUs in Q4 grow to 24.5 million, up 37% year-over-year. Our paying ratio expanded to 9%. Above all, as we gain more users, more advertising dollars are being directed to our platform. Our full year advertising revenue reached to RMB 4.5 billion, up 145% year-over-year, spearheading our top line growth. We firmly believe the value of our community is tied closely with the scale of our users and their level of trust in our platform.
There is no doubt that our Gen Z+ users are the most valuable group in the market. They are our society's backbone and the mainstream consumers in all types of economics. Our engaging community connects and tightly bonds those users to our platform, creating an invaluable relationship built on trust, which leads to multiple avenues for commercialization. Looking at our plan for 2022 in more detail, quality growth will remain our top priority. We will continue to build our multi-category content ecosystem, meeting users' video demand across various consumption scenarios. We remain committed to achieve our user target of 400 million MAUs by the end of 2023. While we grow our user base, we will continue to improve our commercialization capabilities.
Specifically, we plan to increase our revenue per MAU by developing more value-added services to meet our users' evolving needs, as well as increasing our ad revenue by optimizing our ad products and improve ad efficiency. Our revenue per MAU in 2021 increased by 20% year-over-year, and we expect this trend to continue. More importantly, we plan to optimize our capital allocation and effectively control our spending across our business. In 2022, we will strengthen our execution and our commercialization capability and aim to narrow our loss margins. Meanwhile, we hold RMB 30 billion in cash reserve as of the end of 2021. This gives our ample liquidity to support our long-term growth strategy and provides a strong cushion in the evolving industry landscape.
With that overview, I'd like to go through some details of our fourth quarter operations as they related to our content, community, and commercialization. PUGVs continue to be our most prevalent feature, accounting for nearly 94% of our video views in the fourth quarter. As the bedrock of our ecosystem, we are actively expanding our PUGV content categories and scenarios to grow and test our community together. Our top categories in the fourth quarter were lifestyle, games, entertainment, anime, and knowledge. Our active users inspire our creators and vice versa, creating a reciprocal community environment that fuels our virtual cycle. In the fourth quarter, over 3 million monthly active creators, submitting nearly 11 million video creations. That makes 58% more creators and 83% more submissions compared with the same period last year, outpacing our user growth.
Content creators with more than 10,000 followers increased by 41% in the fourth quarter, showing that our community connections was tighter than ever. We have continued to refine our algorithm and create avenues to unlock content creators commercial value, making sure they are seen, recognized, and well rewarded. In January, we honored top 100 content creators at the fourth annual BILIBILI POWER UP 2021 Award Ceremony. Notably, in 2021, over 1.3 million content creators received monetary rewards through various channels on Bilibili, covering near 90% of content creators with over 10,000 followers. Primarily payment channels include our cash incentive program, live broadcasting, the Sparkle ad platform, and the direct tipping from users. By the end of 2021, over 550,000 content creators had enrolled in our cash incentive program.
On top of native ad, our Sparkle platform, we plan to launch more accessible and scalable ad tools and functions within or around the video play frame to help better monetize content creators private domain traffic. As part of user growth strategy, we are upgrading our content ecosystem with a few different ways. The first is expanding our category outreach to appeal to different gender, occupations, and age groups. Each of these groups bring us more avenues to grow our user base. For example, we are advancing our position in the student community, adding more female-oriented content, and expanding our pan knowledge libraries appeal to mature users. Secondly, we are broadening our video formats to address users' needs in different access scenarios. Specifically, we are optimizing our short-form video Story Mode to fit into users' fragmenting time. The initial feedback from our community is encouraging.
It not only satisfies content needs for users on the go and boosts engagement levels, but also helps users discover even more PUGVs and live broadcasting content across our video universe. Additionally, our smart TV app that extends to living rooms is meeting our users' needs for immersive video experience on large screen. This initiative can resonate in sync with our brand proposition. All the videos you like anywhere, anytime. For our OGV department, expanding our OGV category is helping us attract new users, convert users to premium members, and create valuable IP assets. Two main areas of focus will be Chinese anime and the documentary. In November, we announced 51 new Chinese anime titles at our fourth Made by Bilibili Chinese Anime Press Conference. As an imaginative art form, we believe that Chinese anime can transcend barriers of gender, race, and language.
With our increasing global appeal, we also officially upgraded our Chinese anime proposition to Made by Bilibili, Made for Global. We are delighted to see our Chinese anime being highlighted for its originality, long-tail IP asset value, and our successful globalization initiatives. Over the past two years, we have established partnership with Netflix and Sony, distributing 24 titles in overseas markets. In 2021, our top rated anime titles were The Daily Life of the Immortal King Season 2 and Link Click, which not only won the heart of Chinese fans, but also reached over 100 countries anime markets. We also host our first documentary press event in December, and announced it plan to produce 21 new titles in the coming year. As our flagship content category, documentary represent our useful content. In addition to commercial value, it also bring great cultural value and represents our commitment to social responsibility.
Some of our doc series has already turned into important IPs. In January, the return of our reading documentary, And Yet The Books, and police station reality show, The Guardians of Jiefangxi, were both met with great enthusiasm. Turning to our community. Communities around and ground our ecosystem. Our users and content creators form tight bonds and interactions create trust, a strong sense of belonging, inspiration, and retention value. We actively cultivated a fun, informative, and friendly environment where users can express themselves in a supportive community. For the fourth quarter, we had remarkably high engagement and interaction levels, showing that both new and experienced members are finding connection and fun on Bilibili.
As mentioned previously, in Q4, the average daily time spent on Bilibili reached 82 minutes, the highest fourth quarter usage time in our operating history, and the daily video views soared to 2.2 billion, up 80% year-over-year. Monthly interactions in the fourth quarter more than doubled from the same period in 2020, jumping into 10.1 billion. We exit the year with 145 million official members, up 42% year-over-year, and a strong 12-month retention rate of 84%. Now let's look at our commercialization program. In the fourth quarter, our total revenues reached RMB 5.8 billion, up 51% year-over-year, and our full year revenue grew by 62% to RMB 19.4 billion. Revenue per MAU were RMB 77.6 in 2021, up 20% year-over-year.
Having gathered half of China's Gen Z+ population on our platform and understood their needs, we believe we can consistently improve our commercialization capabilities and continue to increase our revenue per MAU. Beginning with our mobile game business. Under the current game industry environment, our goal for 2022 is clear. We will enhance our current domestic game operations while we continue to focus on selectively developing game in-house and overseas game distribution. As for our game pipeline, we currently have five titles approved for domestic release and 13 titles slated for international release in the coming quarters. For the fourth quarter, our mobile game revenues were RMB 1.3 billion, up 15% from the same period last year. We released four new titles domestically and three new titles in overseas market during the quarter. Meanwhile, many of our older games were still showing long life cycles.
Revenues were still on the rise for some of our exclusive licensed games, such as Azur Lane. As a game operator, we continue to protect young players from game addiction and promote healthy game behavior following the anti-addiction measures we launched early on for teenage players. In 2021, our revenue from players under eighteen years old account for less than 1% of our game revenues. Looking at our VAS business. Our VAS business remains strong with revenues of RMB 1.9 billion in the fourth quarter, up 52% year-over-year. VAS revenue per MAU were RMB 27.8 in 2021, up 35.4% year-over-year. As we develop more products and services based on our users' entertainment needs, we believe VAS has great growth potentials beyond live broadcasting and the premium memberships.
We will actively explore innovative avenues within our community to increase VAS revenue per MAU. Live broadcasting, as an organic component of our video content ecosystem, has formed multiple self-reinforcing circulation within our community. For example, we see great synergies between content creators and live broadcasting hosts, as well as their commercialization opportunities. In 2021, over 70% of our content creators with 1 million followers were live broadcasting hosts. Over 600,000 content creators generated income through live broadcasting during the year. In 2022, we will continue to explore innovative ways to incorporate live broadcasting with our video community and enhance users' overall experience. Turning to our premium membership business. By the end of the fourth quarter, the number of premium memberships reached an exciting milestone of 20 million, representing an increase of 39% year-over-year.
Notably, near 80% of our premium members signed up for an annual or continuous monthly plan, demonstrating their love and trust in our platform. As for advertising, our advertising business is a great demonstration of how our value come from our users and strong trust between them and the community. We hit another home run with our advertising services in the fourth quarter. Ad revenue in Q4 reached RMB 1.6 billion, up 120% year-over-year. Full-year ad revenue coming at RMB 4.5 billion, up 145% year-over-year. Ad revenue per MAU in 2021 was RMB 18.1, up 83% year-over-year. With nearly half of China's Gen Z+ users on platform, Bilibili has become a must for advertisers looking to reach this golden consumer group.
Video-based integrated marketing campaigns have emerged as a key solution. In 2021, more of our native ads went viral, alerting even more advertisers to our powerful content and its influence among users. In 2022, we plan to further integrate our Sparkle ad platform with more scalable ad products. This will enable native ads to gain more exposure by realizing more efficient and smooth sales conversions on Bilibili, achieving the efforts of brand and performance ads in one shot. Additionally, we plan to enrich our ad display scenarios with Story Mode and smart TV, greatly increasing our ad inventory and offering more place for advertisers to reach their desired customers. We are glad to see our integrated marketing campaigns have been welcomed by more and more new industries.
In 2021, we welcomed a well-known consumer brand and a premier automotive group as our key sponsors of the New Year's Eve Gala. In the fourth quarter, our top five advertising verticals were mobile games, e-commerce, 3C and digital products, food and beverage, and automotive. As we move through 2022, we expect monetization to continue paving the way for massive industry opportunities forward. We will continue expanding our user base, and we believe we are still in the initial stages of ramping our monetization efforts. In 2022, we will work to generate more revenue per MAU by introducing more value-added services to our users and valuable ad products to our partners. At the same time, we are focused on expense control and overall operating efficiency improvement. This concludes Mr. Chen's remarks.
I will now provide a brief overview of our financial results for the fourth quarter of 2021 and outlook for the first quarter of 2022. Total net revenue for the fourth quarter was RMB 5.8 billion, up 51% from the same period of 2020. We continue to see a more balanced revenue mix driven by our diversified commercialization channels. Our total net revenues breakdown by revenue stream was approximately 22% mobile games, 33% VAS, 38% advertising, and 17% e-commerce and other business. Cost of revenues increased by 62% year-over-year to RMB 4.7 billion. Revenue sharing costs, a key component of cost of revenues, were RMB 2.4 billion, representing 91% increase from the same period in 2020.
Gross profit increased by 16% year-over-year to RMB 1.1 billion, and our gross margin was 19% in the fourth quarter. Total operating expenses was RMB 3.1 billion, up 68% from the same period in 2020. Sales and marketing expenses was RMB 1.8 billion, representing a 73% increase year-over-year. The increase was primarily attributed to increased channel and marketing expenses to promote our app and brand, as well as promotional expenses for our mobile games. Moving into 2022, we aim to actively manage and control our marketing spending and improve our overall operating efficiency. G&A expenses was RMB 538.1 million, representing a 57% increase year-over-year.
The increase was primarily due to increased headcount in G&A personnel, share-based compensation expenses, allowance for doubtful accounts, rental expenses, and other G&A expenses. R&D expenses was RMB 797.6 million, representing a 65% increase year-over-year. The increase was primarily due to increased headcount in research and development team and share-based compensation expenses. Net loss was RMB 2.1 billion for the fourth quarter of 2021, compared with RMB 843.7 million in the same period of 2020.
Adjusted net loss, which is a non-GAAP measure that excludes share-based compensation expenses, amortization expenses related to intangible assets acquired through business acquisitions, income tax related to the intangible assets acquired through business acquisition, and the loss of fair value change in public traded companies, was RMB 1.7 billion, compared with RMB 0.7 billion in the same period of 2020. Basic and diluted net loss per share were each RMB 5.34. Adjusted basic and diluted net loss per share was each RMB 4.22. For the full year of 2021, our total net revenues increased by 62% to RMB 19.4 billion. Notably, non-GAAP revenue for 2021 grew 99% year on year, accounting for 74% of the total revenue. Gross profit for the 2021 full year increased 42% to RMB 4 billion.
Net loss for 2021 was RMB 6.8 billion, compared with RMB 3.1 billion in 2020. Adjusted net loss for 2021 was RMB 5.5 billion, compared with RMB 2.6 billion in 2020. Basic and diluted net loss per share for 2021 was RMB 17.87 as compared with RMB 8.71 in 2020. Adjusted basic and diluted net loss per share was RMB 14.42, compared with RMB 7.4 in 2020.
As of December 31, 2021, we had cash equivalents, term deposits, and short-term investments of RMB 13.2 billion, compared with RMB 12.8 billion as of December 31, 2020. Driving long-term values for all of our stakeholders remains our broader objective. We are pleased to announce an up to $500 million share repurchase program in next 24 months here. In addition, our Chairman and CEO, Chen Rui, also expressed his intention to use his personal funds to purchase the company outstanding ADS for up to $10 million in the next 24 months here. With that in mind, we are currently projecting net revenues for the first quarter of 2022 to be between RMB 5.3 billion and RMB 5.5 billion. Thank you for your attention. We would like now to open the call to your questions.
Operator, please go ahead.
Thank you. To ask a question, you will need to press star one on your telephone. For your question, press the pound key. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Please limit your questions to one at a time. If you wish to have follow-up questions, please rejoin the queue. Please stand by while we compile the Q&A roster. Our first question is from Lei Zhang with Bank of America Merrill Lynch. Your line is open.
[Non-English Content] Thanks, management, for taking my question.
Firstly, a high level question on your strategic focus in 2022. Secondly, on user side, what's our outlook in user growth for 2022, and how should we achieve our user targets? Relate to that, any color on the fourth quarter user and community development? Thank you.
[Non-English Content]
Our key word for 2022 will still be focused on growth. Growth on the user side, on the revenue side, and most importantly, we want to maintain the growth quality. We want to keep it a high quality growth.
[Non-English Content]
For example, in Q4, we maintained a very high quality user growth rate. Our MAU reached 272 million, up 35% year-over-year. Most importantly, the healthiness of that MAU is very strong. For example, the average daily time spent per DAU reached 82 minutes, and that is the highest DAU time spent we've seen in the fourth quarter operating history.
[Non-English Content]
On the community engagement side, our monthly interactions grew over 116% year-over-year, reaching 10 billion. On the retention side, the 12-month retention rate of our official member has further increased to 84%.
[Non-English Content]
On top of those engagement numbers, we noticed that all the users that come into our community has effectively converted to our paying users. In the fourth quarter, the monthly MPUs increased 37% year-over-year, outpacing the MAU growth rate. Our annual paying ratio reached 9%, which is improved from 8% from last 2020, and 6%+ compared to 2019. This is very important. Over the period of growth, we are able to deliver this quality set of numbers to show that we really have delivered a high quality growth rate.
[Non-English Content]
As we look ahead, we still are very, very confident to achieve our 400 million MAU user target by end of 2023. Looking at our January number, our overall MAU has reached over 300 million milestone. More importantly, the daily time spent per DAU has reached over 90 minutes. The momentum, growth momentum remained very, very strong and we're confident to continue to deliver this high quality, high growth rate set of numbers.
[Non-English Content]
As we look in the past, we think Bilibili is a very unique product across the global internet landscape. We have maintained a fast and healthy growth rate for the past 13 years. We think that contributes to our powerful content ecosystem-driven business model. Based on this business model, we're still very confident that this growth momentum can continue.
[Non-English Content]
If we're taking another look at our growth on the revenue side for the past two years, we see revenue growth as important as our user growth, especially within our VAS and advertising segment, and they have been keeping roughly around 100% year-on-year growth rate.
[ Non-English Content]
As we look into our past work priority or resource allocation in the past 2 years, for the energy we put in revenue growth versus user growth could split to a 3-to-7 ratio. For this year, we will adjust our resource allocation and split our energy and resource equally into both revenue growth and user growth. In other words, revenue growth will play a much more important role across our work priorities.
[ Non-English Content]
On the other hand, we've noticed that there's been a fluctuation in the capital market. There's been a fluctuation on the stock price as well. From another perspective, this is actually helping the overall industry to reduce the rat race. For example, on the sales and marketing side and compete for talent side, there's been a very heavy, intense rat race across the sector. We believe that situation will alleviate this year, and we'll pay more attention to control our expenses and reduce our costs and improve our overall efficiency. Putting every dollar we spend into more use.
[ Non-English Content]
That's all the answers.
Our next question comes from Alex Yao with JPMorgan. Your line is open.
[Non-English Content] Good evening management, I'd like to ask a couple of questions on a relatively new product, Story Mode.
Can you share with us some of the latest thoughts around the product penetration rates? What kind of the role you want this product to play in our content ecosystem over the medium to longer term. Lastly, how do you guys think about the monetization potential and the revenue model for this product? Thank you.
[ Non-English Content]
The product Story Mode actually has already been online last year. However, our users can't tell. They don't know the product name is called Story Mode because it's integrated in our overall user interface. It's naturally embedded in our recommendation feeds to satisfy users' needs for this certain product.
[ Non-English Content]
The reason why we started the Story Mode, because, from my personal perspective, I think Bilibili should not be a tool. It should be a video community surrounds with people's needs, and that needs may involve multiple scenarios on multiple screens, whether it's mid to longer form, whether it's in the horizontal format. We believe those content can be shorter, and they can also be in a vertical format. It could also be live broadcasting. Addressing this trend or our understanding to users needs, we launched the Story Mode to supplement our application scenarios.
[ Non-English Content]
In the last earnings report, we mentioned our initiatives on the smart TV side, and those initiatives are adapted to this multi-scenario strategy, which we are putting our content into people's living rooms. For the adoption of Story Mode, we hope to satisfy users' on-the-go entertainment needs in their fragmented time.
[ Non-English Content]
If you have used Story Mode, you will notice even though the user interface is in a vertical format, might look like a Douyin’s product. However, the actual experience will be full Bilibili featured experience. For example, on our Story Mode, there’s content range from one minute, two minutes, three minutes, and the quality is similar to our PUGV, and there will be bullet chat flying across the screen.
[ Non-English Content]
On the Content category, we can see Story Mode as a very natural extension to our PUGV ecosystem. Massive number of Story Mode video has been produced by our PUGV content creators. In another way, it's just those content creator are leveraging this new outlet and new tools to create content.
[ Non-English Content]
On our product philosophy, it's always has been surrounded by users, and the product progress follows our users needs towards video content. From several data point, we notice that the adoption of Story Mode has been widely accepted by our users. On a DAU level, the penetration is over 20%, and over 30% of those views will be subject to the thumbs up, the likes, which means our users are accepting and loving this new product.
[ Non-English Content]
In summary, we think the content the user chooses is largely based on the content category and the overall community experience, not by the length of it. For example, a Coke lover would not care if the Coke is in a can or in a bottle. A soda lover wouldn't care if the Coke is black and Fanta is white. All in all, it's the category, the content category, and the community environment is helping users to decide which product they follow. In my view, I think Story Mode is a product that can be fully integrated, immersed in our content category as well as our community. In the not so distant future, the penetration could potentially reach to 50% or even above. Because after all, what attracts users is about the content category itself, not the length of the content, or whether it's in a vertical format or in a horizontal format.
[ Non-English Content]
Lastly, on the commercialization potential, because Story Mode is a product based on mobile devices and vertical format, actually in this industry, the commercialization of this product has been pretty mature, whether it's on the distribution of advertisement or it's traffic monetization for live broadcasting services. It's just about our implementation on the execution of our commercialization strategy. Based on our new initial testing and initial data, we've noticed that it has very good efficiency, distribution efficiency to commercial ads as well as our live broadcasting services. That would be all.
Our next question comes from Alex Poon with Morgan Stanley. Your line is open.
[Non-English Content] Thanks, management, for taking my question. My question is related to our loss control in 2022, including how our gross margin will trend from Q1 to Q4 this year, assuming we don't get any game license approval. Also, the by-segment gross margin trend including advertising and live streaming, how would they change this year? Our headcount expansion plan, and also the timetable for breakeven and profitability. Thank you very much.
Thank you, Alex. Let me take this question. You are right. We agree that profitability is a key objective for all the companies. Our company, we believe in, you know, long-term value. We strive to find a balance, you know, between achieving a breakeven point and investing for long-term opportunities rather than just, you know, pursuing certain short-term financial metrics. We believe by doing so, it will, you know, maximize the interest of our shareholders. As mentioned by our CEO, we are confident that when maintaining a healthy user and revenue growth, the non-GAAP operating loss ratio could be narrowed on a year-over-year basis starting from 2022 by improving the monetization efficiency, including the revenue per MAU and control the operating expenses.
The target is to achieve the breakeven point on non-GAAP basis by 2024. Let's look into the, you know, the details. First of all, we aim to, you know, proactively manage our operating expense. Sales and marketing expense, for example, is measurable and controllable. For example, the user acquisition cost is a big component of our sales and marketing expenses only increased by 50%, while total revenue increased by 61% year-over-year in 2021. There are still room to further optimize the marketing spending while we reach 400 million MAU target. We expect the total sales and marketing expenses as a percentage of revenue will decline starting from 2022.
R&D expenses mainly include the personnel cost associated with developing the new games, enhancing the data capabilities, and optimizing the new product features, which are critical to increase our productivity and monetization capability. We understand the importance of attracting talents. In 2022, we will continue to invest in R&D, but we will closely monitor the ROI for all of our R&D projects. We expect that R&D expenses as a percentage of total revenue will start to show significant leverage from 2023 onwards. Secondly, there are still ample room for improvement in user monetization efficiency. We are still in a very early stage of commercialization. Our revenue per MAU increased by 20% last year. The increase were mainly driven by 34% increase in VAS revenue per MAU and 83% increase in ad revenue per MAU.
Looking forward, those trends will continue, and we expect both VAS and ad revenue per MAU would have potential to double their current levels in three years. Last but not least, as you asked the growth profit margin. While our game business undergoes a transition period, we are happy to see revenue contribution from advertising has risen from 13% in 2020 to 23% in 2021, and expected to further increase in 2022, in this year. In addition, we expect to introduce more VAS services and further improve the VAS gross profit margin. As a result, with the improvement of our commercialization capabilities, I think the overall, the 2022 gross margin is expected to be slightly lower in Q1 this year, but will, you know, gradually improve during this year.
In the three years, the overall gross profit margin will be improved around 30% in three years. That would be all.
For the headcount, I'll translate for Mr. Chen's remarks. [ Non-English Content]
[ Non-English Content]
Actually in the past few years, the growth rate have slowed for the number of our staff. As for 2022, there's gonna be a very limited headcount increase. My request for our HR this year is laser focus on the business areas that we want to have decent growth. For those area, we can hire and add certain headcounts. The rest of the business is controlled.
Our next question from Felix Liu with UBS. Your line is open.
[ Non-English Content] Thank you management for taking my question.
Congratulations on the 4Q results, especially on the strong ad performance. I would like to ask question on the ad outlook for 2022 as well as on the first quarter, especially in the light of recent macro weakness, as well as the temporary suspension in new game license. Could you elaborate on your key commercialization initiatives for advertisements for 2022? Thank you.
[ Non-English Content]
I would like to take this opportunity to share with you the growth driver behind Bilibili's advertisement business. You may see in the past few quarters, our advertisement revenue has been growing over 100%, has been very strong. We've all also heard suspicions from the market that Bilibili user experience is so good, how can you drive your advertising revenue without compromising user experience? The number one reason is that we have experienced a very strong user growth. At the same time, our ad efficiency per user has also been increasing pretty nicely. In the fourth quarter, our DAU grew 34% year- over -year, and on a full year level in 2021, the ad revenue per MAU has increased 83%.
For those two factors combined together, that gives you the over 100% ad revenue growth.
[ Non-English Content]
The second growth driver would be the value of the Bilibili user has been increasing, and at the same time, the influence of our platform has been well-recognized by the market. If we look in the past few years, on the horizontal perspective, our user has been growing pretty nicely. In a vertical view, we actually have constantly breaking up our own circle and allowing more different groups of user, occupation, gender, user being seen and recognize the existence of Bilibili. That leads to more attention from different advertising verticals. For example, in the past few years, our leading verticals would be games and 3C digital products. This slowly expands to skincare and cosmetics, food and beverage. For this year, we are looking to expand into verticals like automotive.
As a matter of fact, in fourth quarter last year, automotive has become our top five advertising industry verticals.
[ Non-English Content]
The third growth driver would be the visualization of advertisement. More and more advertisement will be presented in the format of video. That's why we are adopting the trend, launching product like TopView, different advertising format based on our different video formats, including native ads, Story Mode. The launch of Story Mode, it will also be adapting to current industries, advertising video in a vertical format. All of this will help us to drive our advertising growth in the next few years.
[ Non-English Content]
The fourth growth driver would be our own unique advertising format, aka our native ads. The Bilibili native ads largely were produced by our content creators. They're actually combining their creativity to custom-make, customize, an advertisement within its own video. It's known as our Sparkle native ads. We're delighted to see more and more advertiser has been adopting and recognize this innovative format of advertisement. In 2021, in the fourth quarter of 2021, over 4,000 advertisers has been invested in our Sparkle ad platform. The repeated purchase rate has reached 75%. On the other hand, more and more content creator has signed up for our Sparkle platform. In 2021, over 22,000 content creator has signed up on our Sparkle platform to open themselves to this native ads opportunity.
[ Non-English Content]
We think the native ads is a very, very important format of a advertisement for Bilibili. It's like a reservoir for us to keep the advertisers. The native ads, the content creator, is helping us to attract those advertisers. They're staying with us. What we need to do next is to further integrate the native ads with more of our standardized, scalable, advertising formats to allow native ads to help us to drive the sale of our other standard advertisement products.
[ Non-English Content]
Lastly, with the last growth driver will be to multi-scenario, multi-screen strategy. We believe by further integrate those scenarios and devices, we can help us to open more ad inventories and improve our overall ad efficiency.
[ Non-English Content]
From a data perspective, as our PUGV continue to expand rapidly, the new territory, which is the smart devices, smart TV and Story Mode, is helping us open up more scenarios, more devices, and more video content can leverage for commercial advertisement opportunities.
[ Non-English Content]
In summary, I've always believed that the increase of advertising revenue does not conflict with user experience. In another way, actually, it actually shares the same goal because we believe the effect of an advertisement largely depends on the platform's influence among users' mindsets. A good platform can really put that influence to its users. Hence, the goal is connected.
[ Non-English Content]
As for the outlook for 2022, despite the macro environment headwind and slowdown of digital advertisement, because of those five growth driver I mentioned earlier, we are confident under this environment we can still deliver a healthy, stable ad revenue growth at least above industry average.
[ Non-English Content]
Yeah, that would be all.
That concludes the question and answer session. I would like to turn the conference back over to management for any additional or closing comments.
Thank you once again for joining us today. If you have further questions, please contact me, Juliet Yang, Bilibili Executive IR Director or TPG Investor Relations. Our contact information for IR in both China and the U.S. can be found on today's press release. Have a great day. Thank you. Bye-bye.
This concludes today's conference call. Thank you for participating. You may now disconnect.