Good day. Welcome to the Bilibili 2019 second quarter earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Juliet Yang, Senior Director of Investor Relations. Please go ahead.
Thank you, operator. Please note the discussion today will contain forward-looking statements relating to the company's future performances and are intended to qualify the safe harbor from liability, as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performances and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Bilibili's business and financial results is included in the certain filing of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only.
For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the 2019 second quarter financial results news release issued earlier today. As a reminder, this conference call is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on Bilibili investor relations website at ir.bilibili.com. Joining us today on the call from Bilibili senior management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer, Ms. Ni 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 today's earnings call. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen. I'm happy to report that on June 26th, 2019, we celebrated Bilibili's 10-year anniversary. Over the past decade, we have grown from a small personal site to a leading online entertainment platform, where over 100 million active users come together to find and share their interests. We attribute our success to our constant focus on PUGV ecosystem and community environment, which form the foundation for continued high-quality growth. Looking at the next 10 years, we are accelerating this growth. We plan to achieve this in two ways: more proactive user growth and improved commercialization efforts. We are proud to deliver another remarkable period of growth in both our user base and top line.
Importantly, our second quarter results demonstrate the type of high-quality user growth we are aiming to achieve. We added nine million MAUs to our community on a sequential quarterly basis. This is our highest net add since 2017, bringing our total MAUs to 110.4 million, increasing 30% year-on-year. We think this is good. Our mobile MAUs once again grow faster than our MAUs and were up 35% year-on-year, reaching 96.2 million. High-quality user growth has always been a key focus for Bilibili. Beyond accelerated growth, we are continuously improving the activeness and engagement for our user community. In the second quarter, our total DAUs outpaced our MAU growth rate and grew by 41% year-over-year, reaching a record 33.2 million. Our users are also spending more time on our platform, averaging 78 minutes per day, up three minutes compared to the same period last year.
As we move into our peak summer season, we are seeing this healthy trend continue. We raised our MAU target from the range of 110 million-120 million to the range of 120 million-130 million for this year, and set up a new target of reaching 220 million MAUs by 2021. The fast pace for our user growth paired with the quality of these users is fueling our top-line expansion. We continue to convert more visitors to paid users by offering premium content and a unique community experience. In Q2, our average month paying users more than doubled compared with the same period last year, reaching over 6.3 million. Revenue per MAU increased by 15%, and non-GAAP revenue per MAU increased by 102% year-over-year. Our revenue reached RMB 1.54 billion, beating the high end of our previous guidance, previously at RMB 1.49 billion.
What's driving this remarkable growth of both user numbers and revenue comes back to the three pillars of our business: content, community, and commercialization. I'd like to touch on each of these areas, provide some insight into our growth strategy, and talk about the performance within these metrics for the second quarter. First and foremost, content. Content is the paramount of attracting users at a rapid pace and keeping them engaged. We are strategically positioned on a less competitive track when we enjoy the growing roster of high-quality content through our PUGV ecosystem at a relatively low cost. Leveraging Bilibili's high-trusted platform and unique community environment, we continue to attract talented content creators and grow our content offering. During the second quarter, we had an average of 854,000 active content creators uploading 2.4 million videos monthly. This represents the year-over-year increase of 144% and 107% respectively.
To better support and motivate our content creators, we are continuously improving our product tools and services to make content creation easier. Our mobile content submission function allow our content creators to create content anytime, anywhere. Our newly launched interactive video tools creates a brand-new fun way for storytelling that is very easy to use. We are also actively promoting video blog as one of the new content formats to express creative ideas. So far, this is gaining great traction with both content creators and users. In addition, our cash incentive program continued to encourage over 160,000 content creators by providing a monetary reward for their original and high-quality creation. As a supplement to our vast PUGV content library, we continue to expand our OGV offerings by acquiring premium content and important IP that can be monetized across the entertainment spectrum.
As an example of this, at the end of June, we acquired exclusive animation adaptation rights to the award-winning sci-fi "The Three-Body Problem," one of the most renowned sci-fi IPs in China. We are thrilled to bring this exciting tale to life in a variety of entertainment forms, including animation, mobile games, comics, and audio drama. Through this adaptation plan, we aim to maximize the reach of the story and the return on our investment. In the self-producing and co-producing department, we are delighted to see our self-produced and IP-owned titles gaining traction. Our signature food documentary series, "The Story of Chuan'r", welcomed a second season in July and was much hit. Our co-produced talk show, "Informal Talks" and self-produced animal reality show, "Animal Hospital," was also well-received by our users. Notably, the content verticals we choose enjoy relatively lower production costs while attracting a broader population of users.
They can also yield considerable revenue through advertising and various commercial opportunities. Secondly, let's look at our community. As we welcome more members in our community, we continue to see deep levels of engagement and interactions among our users. In the second quarter, we have 586 million daily views, up 84% year-over-year. On the engagement front, our users generated 1.8 billion interactions monthly through bullet chat, comments, likes, and Bilibili moment posts, up 118% compared with the same period last year. In addition to engagement levels, the number of official members and their retention rates are also important data points that represent the quality of our user growth. At the end of second quarter, we had 54 million official members who passed our 100 question exam, up 40% year-over-year. Their 12-month retention rate remains at about 80%.
These official members tend to be the most active and engaged with both our content and each other. They are also more willing to pay for premium content. We will continue to improve our product and content offerings to convert more official members to paying users. Last but not least, commercialization. Our Gen Z concentrated user base has a much stronger willingness to pay for our entertainment services than any other generation. According to the latest QuestMobile report, around 60%-80% of the paying users who pay for mobile games, live broadcasting, and online videos in China are Gen Z. Our business model is designed to address the entertainment and the interaction needs of this important population. Besides traffic, we can monetize our users' entertainment preference through mobile games, live broadcasting, advertising, and other value-added services.
Let's first take a look at our game business. Building our massive base of game lovers and highly engaged community, we have become one of the largest game communities in China, covering PC, mobile, console, and indie games. We continue to add more games to our portfolio and improve our distribution efficiency. In the second quarter of 2019, revenue from our mobile games grew 16% year-over-year to CNY 920 million, led primarily by Fate/Grand Order, or FGO, and the blockbuster ACG-themed mobile game Arknights, which we released in May. Being the exclusive jointly operator of Arknights on Android channels in China, we helped it attract over 3 million core ACG users to the game. The success of Arknights also shown the market's increased demand for ACG games.
More importantly, it is a strong testimony to Bilibili's robust distribution power for high-quality games. On the exclusively licensed game front, we have released a number of new titles in recent months. These include Japanese music RPG BanG Dream! in May, an exciting domestic RPG, Final Gear, in July, and a highly-rated female romance RPG, Untouchable Pawn, in August. All three titles have gained good traction among different group of gamers. Final Gear and Untouchable Pawn ranked the number 1 on top free game and top paid download chart on China's iOS App Store shortly after their releases, respectively. Looking at our content updates and new game pipeline, we are excited to celebrating FGO's 3-year anniversary beginning at the end of August with a major content update and accompanying promotion activities. We also have several titles that have acquired approvals and are scheduled to release in the coming months.
These include exclusively licensed Alternative Girls and jointly operated web game The Legend of Heroes, and Tencent's highly anticipated ACG mobile game, Fox Spirit Matchmaker: Huliang Xiaohongniao. In addition, we look forward to expanding our game distribution outside the mainland China. We plan to release a series of ACG titles in select Asian markets, including Furious Yama, Final Gear, Girl Cafe Gun 2, and Duckhorn. Looking at our live broadcasting and the VAS, revenue increased by 175% year over year to RMB 326 million in the second quarter of 2019, with contribution from both our live broadcasting business and premium memberships. Currently, game, Vtuber, audio, and ACG-related talent shows are the top categories gaining traffic and converting visitors to paying users. We are also actively expanding our e-sport-related live broadcasting content offering by introducing top e-sports matches, including LPL, OWL, KPL, and TI.
These premium e-sports content are attracting tens of millions of viewers and converting our deep pool of game lovers to live broadcasting users. Our premium membership program gives paying users access to advanced or exclusive content and continues to bring in new subscriptions. By the end of June, we had recorded 5.3 million valid premium members, up 148% year-on-year. Advertising business, we are beginning to see positive signs despite a challenging market economics environment. Revenue from advertising increasing 75% year-over-year to RMB 168 million in the second quarter of 2019. We are also improving advertising efficiencies, which helps increase our unit price. The top 3 industry verticals for brand advertising in the second quarter were skincare and cosmetics, food and beverage, and e-commerce. The top 3 verticals for performance-based advertising were games, education, and e-commerce.
Finally, our e-commerce and other revenue stream also continued to grow, reaching RMB 124 million in the second quarter, an increase of 489% from the same period 2018, largely due to our expanding commercial platform further sales. We have made several investments to scale our business over time, expand our revenue streams. Our majority stake in Chaodian extends our reach in offline entertainment and adds a new revenue stream to our commercialization efforts. We can now capitalize Chaodian's expertise in offline event planning, as well as talented acquisition and management. Similar to our investment in Bilibili Comics and Manman APP , we believe this investment has great synergies with our existing business and will further expand our commercialization capabilities. Our partnerships with other market leaders such as Tencent and Alibaba are also progressing and adding our growth.
We continue to expand domestic animation copyright and collaborate on some of the A-list titles, including new season of "Quanzhi Gao Shou." On the games front, we now jointly operate a number of Tencent highly-rated mobile games, including Game of Thrones, Spirit Hunter, and 8th Fourth Warrior. With more games in the pipeline, we are also working closely with Tencent on the e-sport front. We competed in and own the live broadcasting rights to Tencent's premium e-sport league, LPL and KPL. On the Alibaba partnership front, we have expanded our partnership with new collaboration plans with Tmall in addition to Taobao. We are testing a number of innovative functions to better adapt for e-commerce platform. We expect this integrity to continue to help to expand our advertising services and grow our paying user base. As we move forward, we are focused on continued growth.
User growth is at an all-time high, and we want to build on this momentum. Our strategy calls for more proactive user acquisition as well as improved personalization capability. While we invest in this future, we will also focus on the quality of users by attending to retention rates and ROI of our marketing efforts. We are confident about our user growth plan and believe it will form the foundation for our sustainable growth and future success. This concludes the trends remarks. I will now provide a brief overview of our financial results for the second quarter of 2019. Our total net revenue increased by 50% year-over-year to RMB 1.5 billion. Our non-GAAP revenue accounted for 40% of total revenue in the second quarter, up from 33% in the second quarter of last year.
We are pleased with the progress of commercialization strategy and the average number of monthly paying users more than doubled year-over-year in the second quarter of 2019, reaching 6.3 million. Cost of revenues increased by 66% to RMB 1.3 billion, compared to RMB 776 million in the same period of 2018. Revenue sharing costs are a key component of cost of revenues, with RMB 573 million, representing an increase of 37% from the same period in 2018. Gross profit was relatively flat at RMB 252 million for 2019 second quarter, and RMB 251 million for the comparable period. Our gross profit margin was 16.4%, compared with 24.4% for the comparable period, and improved from 13.8% for the first quarter this year. This sequential margin improvement was mainly thanks to the increased revenue contribution from our high-margin game business.
Total operating expenses increased to RMB 597 million, representing an increase of 67% for the same period of 2018. Selling and marketing expenses was RMB 240 million, represent an 88% increase year-over-year. This increase was primarily attributable to the increased channel and marketing expenses associated with our App and the brand, as well as promotional expense for our mobile games, an increase in headcount in sales and marketing personnel, as well as the fulfillment cost for our e-commerce related products. R&D expenses were RMB 260 million, representing a 64% increase year-over-year. The increase was primarily due to increased headcount in R&D personnel and other increased research and development expenses for online games, App-based development, and our virtual idol business. G&A expenses were RMB 141 million, represents a 44% increase year-over-year.
The increase was primarily due to increased G&A personnel-related expenses and increased amortization expense related to intangible assets acquired through business acquisitions, partially offset by a decrease in share-based compensation expenses. Loss from operations was CNY 345 million, compared with CNY 107 million in the same period of 2018. Net loss was CNY 315 million for the second quarter of 2019, compared with CNY 17 million in the same period of 2018. Adjusted net loss, which is a non-GAAP measure that excludes share-based compensation expenses and amortization expenses related to intangible assets acquired for the CNY 256 million, compared to CNY 19 million in the same period of 2018. Basic and diluted net loss per share were CNY 0.96. Adjusted basic and diluted net loss per share were CNY 0.78.
As of June 30, 2019, the company has cash and cash equivalents, term deposits, as well as short-term investment of RMB 8.6 billion. In April, we completed an offering of convertible senior notes due 2026 in aggregated principal amount of $500 million and concurrent offering of approximately 14.2 million ADS and 6.5 million ADS from certain sale shareholders. The company received in combination of the notes and the share offerings total approximately $733.9 million in net proceeds. Looking ahead, our financial goals are to further grow our business and improve our operating efficiency. With that in mind, we are currently projecting net revenues for the first quarter of 2019 to be between RMB 1.74 billion and RMB 1.77 billion. Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead.
Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash 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. Your first question comes from the line of Hillman Chan from Citi. Please ask your question.
管理层大家好，谢谢大家接受我的提问。首先想问一下关于我们这个Q2强MAU的增长背后的增长策略。首先是为什么是现在来加快这个MAU获取的速度？然后这些新的用户主要是哪些？然后我们是有一些什么特别的策略和方法。还有就是相对于那个成本，然后也可以同时透露一下今年底还有明年那个MAU的target。这是第一个问题。那第二个问题是关于这个直播的，就想问一下，管理层可以再分析一下，我们怎么把视频的一些观众拉到这个直播里。
Excuse me, Hillman, we can't hear you. I'm sorry. Hillman.
Yes。
You are breaking up.
现在听得到吗？现在可以吗？喂？
现在好一点。第一个问题是关于用户为什么要在这个时间点加速来做，然后后面就没有听得太清楚了。
那现在可以吗？我再问一下。那后面就是想说——
很好，可以。
我们主要是从什么渠道去获取这些新的用户，还有这些新的用户他们主要是哪些demographics，还有他们的质量跟新的用户比起来是怎么样的？还有相对应的这个推广的成本，今年底还有明年MAU的一个目标。这个是第一个问题。然后第二个问题是关于这个直播的，就想问一下管理层，可以介绍一下我们接下来有什么策略手段去把视频的一些观众更快地转到观看直播里面，还有加强他们这个直播里面付费的意愿。最主要这两个问题。那我很快翻译一下。Thank you management for taking my question.
Noting that the MAU growth accelerated in the quarter. Could management share more on the user growth strategy? Why are we trying to accelerate the user growth right now in this quarter? Where are we acquiring the users, from which particular channel and addressing which particular user demographics? How we should think about the related marketing expense and the target for MAU by end of this year and next year? My second question is on live streaming. Could management share more on the strategy as to how we convert user from video viewers to live streaming and how we help the users to step up the paying behavior going forward? Thank you very much.
好，我这边刚好可以也说一下，我们为什么在这个阶段会加强对于用户增长的投入。我先把原因说一下吧，然后接下来我觉得我也可以把我们接下来的计划也可以说一下。然后Sam也可以说一下我们在成本方面的一些付出。我觉得我们在这个阶段加强用户增长主要有三个原因。第一个原因就是在过去一年，我们的内容生态建设得到了很大的增强。我们的内容无论从质量还是数量上都获得了质的突破。
Okay. I'll take the first question. I'll discuss why we wanted to accelerate our user growth at this stage and how we're going to do it. Sam will explain a little bit more on the call side. First of all, why we're doing so? Because we have made substantial growth on our content ecosystem. We have made breakthrough on both quality and quantity of our content.
比如说我们不仅在投稿的数量上得到了很大的提升，我们的微微数，我们的用户对于UP主的关注的速度，我们社区的互动，以及我们单DAU的搜索次数都在增加。这个其实就是我们内容生态在持续增强的一个数据证明。
First, for example, on the content side, we have seen substantial growth on the number of content being submitted daily on our platform, and our video views also improved substantially. How many users have participated in the interactions and how many searches per DAU per day? They have all grown substantially over the past few years.
对，还有比如说我们在没有去做所谓的大量的签约，或者说是所谓的给创作者大量补贴的情况下，我们的新的内容品类的成长仍然非常的快。比如说像Vlog，我们的Q2的Vlog的环比增长是81%。而且，比如说在生活类的投稿上，来自于移动的投稿量，Q2占我们平均投稿量的47%，暑期甚至是超过了一半。这个其实都是以前我们不是核心的一个品类，而现在它变成了我们的一个核心品类。
Secondly, we have expanded to new content categories without doing massive subsidy on the content or finding massive new content creators. For example, the new content submission in the Vlog session increased 81% sequentially in Q2. On the mobile content submission side, on average in Q2, about 47% of the content was submitted through mobile content submission function, and this ratio was even over 50% as we moved into summer.
然后还有，比如说我们在盘点上半年我们的内容爆款和我们的Up主的较新兴的时候，我们发现他们大部分是产生在生活、娱乐、科技这些新的品类。
When we look at our blockbuster hit, new titles, new videos emerge on our platform. We see a lot of new content creators and new videos emerging in lifestyle, entertainment, and technology. Those are the relatively more general emerging content categories that become more and more popular on our platform.
所以从我们的内部的评估来看，以我们目前内容生态建设的能力，我们足以承载比现在多一倍多的用户进来，他们对于内容的一个消费都会很满意。
Based on the length and depth of our content, we evaluated the overall content supply on our platform now can at least supply over or can support twice as much of our existing user base.
然后第二点，也是我们从内部的一个数据可以看到，我们在过去的一两年，在用户的增长速度加快、内容的品类扩张的一个情况下，我们社区的一个长期留存其实还提高了。
Second of all, also based on our internal data, as our content getting more massive and our users increasing faster than ever, the retention level and engagement level of our community also improved.
比如说我们在2017年做路演的时候，我们曾经公布过一个数据，我们的12个月正式会员的留存，第12个月的留存是80%。然后从我们今年Q2来看，我们看12个月之前来的用户，今年Q2的一个第12个月的留存，其实它是比之前还要更高的，它是高于80%的。
For example, when we went for IPO in late 2017, the 12-month retention rate of our official members, the member who take the community exam top, were about 80%. When we look at the data right now in second quarter 2019, the one who joined us in second quarter 2018, their 12-month retention rate were even above 80%.
对，因为长期留存是社区特别重要的一个数值。我觉得从这个数值也可以看到，在我们的内容不断扩张、新用户不断进来的情况下，其实用户对于我们的社区是更满意了。
The long-term retention rate has been essential to the longevity and activeness of our community. From this data, it's suggesting the user's long-term satisfaction rate to our community actually improved over time.
第三点，就是我们变现能力在不断地增强。
The third of all is we have improved our monetization capabilities.
比如说付费率来看，我们2019年，就是今年上半年新增用户，当期既产生付费行为的数量，同比增长是60%。
For example, looking at the paying ratio, the number of users who paid in the first half, who are also newly registered users, actually improved 60% year-on-year.
然后这个绝对的数量已经超过了2017年全年新增用户当年转化为新付费用户的数量。
That absolute number of paying user actually already surpassed the number of user who paid in 2017, who are also joined on 2017.
这其实证明我们新引入的用户，我们对他的一个付费转化能力是得到了一个非常大的增强。
This supports our theory that we have improved our ability to monetize new users.
对，比如在非游戏的变现能力方面，我们单MAU用户给平台带来的非游戏收入的同比增长是102%。
On our ability to monetize through non-game business. Our non-game revenue per MAU actually improved 102% year-on-year in the second quarter.
我们Q2在做推广投放的金额同比增长只上升了70%。
The money we spent on user acquisition actually only increased 70% year-on-year, much lesser than the revenue growth.
这个其实证明了我们在一个用户身上，我们获得的收入的一个增幅是远大于我们获取一个新用户的成本。
This means we are able to make much more money on the single new user compared to the money we spend on acquiring them.
还有一个数据，就是我们2017年的用户在2018年的付费的比例是三倍的。其实这个说明了我们引进来的用户，他不仅长期的留存好，他长期的付费的一个行为更好。
Another data that we can provide is the paying ratio for user who joined in 2017. Their 2018 paying ratio actually doubled compared to 2017. That means once the user are in our community, they tend to spend more over time.
所以我刚才所说的三个原因，其实是证明了我们不仅能够把新用户很好地引进来，我们还能把他很好地留下来，并且我们引入的新用户，我们还能够对他做更好的变现。
That concludes three points. One is we are able to attract a lot of high quality user, and we are able to retain them. Most importantly, we can better monetize those new users as our monetization progresses.
对，这个刚才说的是我们为什么要去做这个，就现在要加强对于用户增长的一个工作的重要性，加强对它的投入的原因。第二，就是我们也会说一个简单的目标，就是我们曾经说过，我们在今年预计的之前计划的MAU是1.1到1.2。我们目前认为我们到了今年的Q4，我们是可以做到1.3亿的MAU。
We'd like to update our MAU target. We previously guided our MAU target for this year were 110 million-120 million. We raised that target to reach 120 million-130 million by end of this year.
对。还有的话，就是我们之前也曾经说过，我们应该是能够做到1.5亿的MAU，从未来三年来看，现在应该就是到2021年，这个目标我们也会把它提升为我们能做到2.2亿的MAU。
We also like to update our three-year MAU target from 150 million to 220 million by 2021.
而且这个数字，我认为我们应该可以在用户的质量不变，我们也并不是说是为了达到一个数字的一个目标，就是我们自然地去发挥我们内容生态的一个能量的情况下，我们就能够做到。
More importantly, to achieve this target, we do not just simply want it to increase the number of users. We also want it to maintain the quality of the user, and we can achieve that by leveraging the longevity, the power, the activeness of our content ecosystem.
第三个就是刚才你问的就是我们怎么去做的一个问题。我们的一个方式仍然不会是我们通过单纯地去大量的买量，或者说是我们单纯地去做用户的补贴，或者是UP的补贴那么去做。我们仍然还是会按照我们之前的一个思路，就是我们增强我们的内容生产，我们增强我们的社区的粘度，我们增强我们产品和技术的能力，包括我们增强我们市场品牌渠道的一个投入来做到这样的一个目标。
On how we achieve to that type of target is the same as we said before, Bilibili user growth are not purely just rely on buying topic or making subsidies to our content creators. It's rely on our substantial and rich content ecosystem. We wanted to do constant optimization and upgrade on our content ecosystem, improve the engagement and activeness of our community, and improve our product design and upgrade on our branding, on our marketing efforts, also improve our channel user acquisition.
我这里重点讲三点。第一个是在品牌方面的一个建设。第二个是我们在算法和策略，就是在技术方面的一个增强。第三个是我们在渠道方面的一个增强。我主要是简单介绍这三点。第一个关于品牌。其实之前我们很少去做关于哔哩哔哩的品牌和营销的事情，所以在年轻用户群体里面，我们可以说是无人不知，无人不晓。但是在更大范围，比如说年龄稍大一些的用户，或者说是以前非城市用户身上，我们其实是没有对他们去做marketing的。在这一点上，我们从今年下半年开始，会增加对以前不用B站的用户、没有听说过B站的用户的营销，去做相应的品牌和市场策略。
I'm gonna elaborate our strategy from three aspects. First is on the branding side. Over the past 10 years, we barely promoted any promotion and marketing on Bilibili brand. Although a lot of youngsters know Bilibili very well, but from a wider demographic age bracket or lower tier city, and there are still some of the users do not know Bilibili, do not know what Bilibili can do. In this, starting from the second half of this year, we are going to upgrade our branding campaign and starting to do more branding awareness and promotions to those users who do not know Bilibili.
我觉得这个应该是我们优先级最高的一个工作，因为它其实会对我们后续的增长起到很重要的作用。
This is one of the highest priority job in our to-do list.
第二个是我们对于产品以及对于算法的优化。这个的目的是为了让新用户能够获得更好的体验，就是我们让新用户能够获得更好的留存。我们在过去非常重视用户的长期留存，而在增强用户增长的投入之后，我们会迅速提高我们对新用户留存的能力，这也能够在我们的用户增长里面发挥到很重要的作用。
Second level is to optimize and improve on our product as well as our algorithms. In the past, we have been very focused on the long-term retention of our users, and now we wanted to also focus on the retention rate of our new users. This will definitely be very helpful on the user growth.
第三个措施是我们会加强我们在渠道方面的用户获取能力。我们过去是以自然增长为主，就是在用户的增长方面。我们对于渠道的投放其实是低于同等量级厂商的平均水平的。所以我们接下来会在做好我前面说的几点工作的情况下，增强我们在渠道方面用户获取的能力。
Third is to improve our ability to acquire users from various channels. In the past, our investment in channel acquisitions actually is lower than industry average, who are around our similar scale with their product. In the future, we are going to improve our ability to acquire users from various online and offline channels.
在我们做以上我所说的用户增长的工作的同时，我们会继续增强我们的用户付费的转化能力，然后单用户的收入的提升。所以其实在我看来，我们在过去的一两年，我们对于用户的付费转化和收入提升这个能力应该是已经得到证明了。所以我也认为我们在下一个阶段，用户获得大量增长过后，相应的我们的收入也会同比增长。
Above all else, we wanted to improve our conversion from our traffic to pay and increase revenue per MAU. I think in the past we have proven our ability to monetize our traffic. As our user continue to grow, we should be able to grow our top line as we expand our user base.
接下来Xin可以说一下我们在成本投入方面的一个计划。
Okay, I will keep the answer short. As Chairman has stated, we are at the right time to enter into this strategy. There are two keywords: all the spending will be controllable and measurable. We will track all the ROI for the spending. As Chairman mentioned, we are not just to look at purely to acquire the new user through the marketing spending, if you look at the marketing dollar we spend
We will make sure that all the marketing CNY we spend will be collected through the growth of the top line. There are also two or three quarters delay. We should take time for our platform to monetize those user traffics. Based on all the metrics we mentioned during our call, as Rui also mentioned, those conversion from our visitors to the pay users are quite good, and their spending behavior are exceeding our expectations. We will take that very seriously. Secondly, if you want to know some guidance about the marketing CNY spending, actually, in Q3 last year, we spent about 18% of the total revenues for the marketing expenses, and the 16% marketing expenses in Q4. We now guide that number in this year will be around 19%-20% in Q3 and Q4.
You can see it's not a significant increase of the marketing dollar spending. By the way, I'm quite looking forward to very strong annual growth and the growth of the top line in next year.
接下来我回答一下关于直播的问题。确实，我们在过去两个季度可以看到，我们的直播的生态也在慢慢地兴起，它体现在如下几个层面。第一个就是我们在游戏内容方面一直是很有优势的，而我们的直播增强了我们在游戏方面的一个优势。在过去的几个季度，每当行业内新的游戏上线的时候，我们的直播总能够激起一个新的繁荣。同时，随着电竞在中国的越来越普及，我们直播的电竞的受众也在越来越多。这个我们都是可以看到一个可喜的变化。
On your second question regarding our live broadcasting. Over the past few quarters, we can see the content ecosystem of our live broadcasting is also thriving. On the games front, we already have an edge in terms of game-related video content. Game-related live broadcasting is actually helping us to even elevating that competitive advantage. You can see when the market has new games, that will stimulate the growth of content on our live broadcasting content platform. Also, the popularity among e-sports is also starting to show positive effects on our platform.
对，比如说随着像Vlog之类的生活类内容的兴起，与生活类相关的直播的内容也在增长。比如说像学习类的内容之类的，这个在B站上都属于是新兴的一个品类，它也同样映射在我们的直播内容上。
New emerging content categories gaining popularity on our video platform. Narrowed live broadcasting content is also thriving. For example, lifestyle type of content, we are seeing as the Vlog getting more and more popular, the lifestyle-related live broadcasting is also gaining traction. Similar with the study live broadcasting, those are the emerging categories that we see on our live broadcasting platform.
对，我之前曾经说过，直播是B站内容生态的一个自然延伸，它也是B站在内容方面一种能力的一个体现。这个说法在过去几个季度是得到了充分的验证。
We used to say live broadcasting is a natural extension of our video platform, and it's also a type of ability we have to acquire. Over the past few quarters, we have proven that ability.
对，我们过去没有花大量的价钱去签那些所谓的外部的头部的主播，我们也没有做大量的那种高大上的推广，但是我们的直播的用户以及活跃仍然是和我们的主站同步增长的。
In the past, we haven't spent big bucks to do top host signing or big marketing campaigns. However, from the performance of our live broadcasting in the past few quarters, that also is a strong evidence that our live broadcasting is growing with our content ecosystem.
然后在电竞方面，我们其实在过去几个季度也是发现了挺多的亮点，这个亮点也是与我们的内容生态相对应的。比如说我们在虚拟偶像的内容方面，这个是与我们的二次元的那个内容优势相对应的。我们会发现，我们的主播的数量是在不断地增加，我们的用户的数量在不断地增加，付费也是在不断地增加，而且它的付费率相对来说，跟其他的行业其他同行相比，它是一个挺高的水平。
On the monetization front, we can also see a lot of highlights that mirrors or echoes with our video platform ecosystem. The uprising of Vtuber live broadcasting is an evidence to show our dominant position in the ACG industry. The number of Vtuber host and number of viewers who watch Vtuber content and number of users who pay for Vtuber live broadcasting is increasing very fast. We can also see the paying ratio for Vtuber is much higher compared to other regular entertainment categories. We are confident that we are able to become the leading player in the Vtuber live broadcasting industry. On Bilibili, there's a strong fan-host emotional connection already established on our video platform, and we can leverage that fan connection on our live broadcasting platform. The function is actually a tool to monetize the fan economy.
To summarize, the Bilibili live broadcasting advantage is, on the games front, we have equivalent or even stronger capabilities to continue to grow our game-related live broadcasting content, given our massive gamers, user base, and game video content. On Bilibili strongest ACG area, we can also see some of the emerging new content categories, and we can also monetize our emotional connections from hosts and fans.
Okay.
Your next question comes from the line of Thomas Chong from Jefferies. Please ask your question.
Thanks, management, for taking my questions, and congratulations on the strong user growth this quarter. I have a question about our live streaming and VAS. Given the fact that the revenue per MAU is growing very nicely, how should we think about the revenue contribution from live streaming and VAS going forward over the next couple of years? Should we consider it is more driven by revenue per MAU or paying ratio? Thank you.
Okay. Thomas, let me take your question. Currently, the live broadcasting and VAS contribute about 20% of the total revenues. We foresee that number going up in the short term period. We also guided that our non-GAAP revenues as a percentage of total revenue will ultimately contribute around 50% of the total revenues. That includes advertising, live broadcasting, VAS, and other revenues. We're quite looking forward to that. The growth driver for live broadcasting again, is now mainly for the paying ratio as well as the total targeted growth of the MAU we converted through our total MAU to those live broadcasting business as well as our VAS business. Hope that can answer your question.
Thank you.
That concludes the question and answer session. I would now like the conference back to the management for any additional or closing comments.
Thank you once again for joining us today. If you have any further questions, please contact myself, Juliet Yang, Bilibili Senior 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.
Ladies and gentlemen, that does conclude the conference for today. Thank you for participating. You may now all disconnect.