Welcome to JOYY Inc. First Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, we will have a question and answer session. Please note this event is being recorded. I'd now like to hand the conference over to your host today, Mr. Matthew Zhao, General Manager of Investor Relations of the company. Please go ahead.
Thank you, operator. Good morning and good evening, everyone. Welcome to JOYY's First Quarter 2020 earnings conference call. Joining us today are Mr. David Xueling Li, Chairman and CEO of JOYY, CFO Mr. Bing Jin, and COO Ms. Ting Li. For today's call, management will first provide a review of the quarter, and then we will conduct an Q&A session. The First Quarter 2020 financial results and a webcast of this conference call are available at ir.yy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I refer you to our safe harbor statement in our earnings press release, which apply to this call, as we will make forward-looking statements. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB.
I will now turn the call over to our Chairman and CEO, Mr. David Xueling Li. Please go ahead, sir.
Thank you, Matthew. Hello, everyone. Welcome to our first quarter 2020 earnings call today. First of all of us at JOYY Inc. hope you and your loved ones stay safe and healthy. As the COVID-19 pandemic sweeps across the globe, we are experiencing unprecedented disruptions to our normal way of life. To those who combat the pandemic on the front lines, including doctors, nurses, and volunteers, you are the unsung heroes of this extraordinary time. We think highly of your courage, compassion, and dedication. I would also like to thank all of our own employees around the world. You have demonstrated remarkable resilience and adaptability during this time of uncertainty and change. Because of your hard work and ingenuity, we were able to continue delivering strong operating and financial results in the first quarter of 2020, despite the challenging macro environment.
As such, during the period, we grew our total revenues by 49.6% year-over-year to RMB 7.15 billion, thus validating our strategy in the three key areas. Number 1, supercharging our live streaming and short-form video dual-growth engine. Number 2, boosting the social nature of our platforms through the development of new product features. Number 3, solidifying our leadership in the domestic entertainment live streaming industry via content innovation. I would also like to thank all of our own employees around the world. You have demonstrated remarkable resilience and adaptability during this time of uncertainty and change. Because of your hard work and ingenuity, we were able to continue delivering strong operating and financial results in the first quarter of 2020, despite the challenging macro environment.
As such, during the period, we grew our total revenues by 49.6% year-over-year to RMB 7.15 billion, thus validating our strategy in the three key areas. Number one, supercharging our live streaming and short-form video dual-growth engine. Number two, boosting the social nature of our platforms through the development of new product features. Number three, solidifying our leadership in the domestic entertainment live streaming industry via content innovation. First of all, I would like to share some updates regarding the remarkable progress we have made in implementing our globalization strategy. As many of you have noticed, with a revenue contribution of over RMB 2.1 billion in the first quarter, BIGO is catching up to YY Live in terms of revenue generation. Even more striking is that BIGO's revenue is increasing at a rate of 99.3% year-over-year.
This achievement is a result of our determined pursuit of our globalization strategy, which we set up several years ago. We capitalized on the global trend of live streaming and short-form video and established leadership position in both areas. Meanwhile, this also ushers in an even brighter future.
在2020年的第一个季度，BIGO LIVE的用户和收入都获得了大幅度地提升。在用户侧，BIGO LIVE的移动MAU达到了2670万，再创历史新高，同比增长了37.8%，环比增长了15.9%。在收入侧，主要得益于BIGO LIVE收入的高速成长，BIGO业务板块的直播收入达到了19.7亿人民币，同比增长了92.4%。BIGO LIVE在美国、欧洲和日韩等发达国家的市场收入进一步扩张。第一季度，发达国家贡献了BIGO LIVE收入的33.9%，这一比例比去年同期的23.5%又提高了很多，这充分证明了BIGO LIVE的直播模式的全球拓展性。而且我们在很多发达国家的直播渗透率还很低，这又意味着未来有巨大的成长空间。BIGO LIVE的盈利水平也在持续提高。第一季度，BIGO LIVE在非美国会计准则Non-GAAP下的净利率超过了25%。BIGO LIVE之所以能够成功地在全球不同的语言文化、价值观的地区实现业务的突破，核心原因是BIGO LIVE在运营过程中一直强调的本地化深度运营能力的提升。目前，BIGO LIVE在全球建立了30多个区域运营中心，对当地的主播和内容生态进行深度地运营。未来，BIGO LIVE将在四大区域重点发展市场，包括北美、欧洲、中东、日韩澳新。基于这几个市场的潜在用户群数量和消费能力的分析和判断，我们相信几年以后，每一个市场都可以培育出一个超过我们目前在中国收入规模的直播业务体量，这奠定了未来几年我们可以保持海外直播收入高速成长。
In the first quarter, BIGO LIVE has witnessed impressive growth in both users and revenue. On the user side, BIGO LIVE grew its mobile MAUs by 37.8% year-over-year and 15.9% sequentially to 26.7 million, reaching a historical high. On the revenue side, thanks to the rapid growth of BIGO LIVE's revenue, BIGO's live streaming revenue increased by 92.4% year-over-year to RMB 1.97 billion. In particular, its revenue contribution from developed markets such as North America, Europe, Japan, and South Korea increased to 33.9% during the quarter, compared to 23.5% a year ago. This demonstrates that BIGO LIVE's live streaming model can be replicated globally. Meanwhile, as the live streaming penetration rate is still very low in many developed markets, we firmly believe that we have only just scratched the surface of our global growth potential. On top of user and revenue growth, BIGO LIVE's profitability also continues to improve.
The Non-GAAP net margin of BIGO LIVE was well over 25% in the first quarter of 2020. What has contributed to BIGO LIVE's rapid global expansion is its strong localization capabilities that is definitely adapt to local languages, cultures and social values. It has established more than 30 regional operation centers around the world by working closely with local hosts to cultivate a diverse and engaging content ecosystem. Going forward, we plan to further expand BIGO LIVE's presence throughout four key areas: North America, Europe, the Middle East, Japan, South Korea, Australia, and New Zealand. Taking into account of each market's user base and spending power, we think that every one of those markets has the potential of exceeding the revenue scale currently generated from our domestic live streaming business in China.
This lays a solid foundation of the rapid growth of our overseas live streaming revenues in the coming years.
海外直播市场除了拥有几倍于中国直播收入的潜力以外，还具备了更强的一个社交属性。一季度BIGO LIVE的日开播率达到了13%，远远高于了国内的直播模式的开播率，其实也高过了很多国内的短视频用户的上传的开播率，体现了BIGO LIVE的社交直播属性，这充分证明海外直播是真正意义上的全民直播。本季度我们也针对BIGO LIVE用户社交属性强的特点，进一步地对BIGO LIVE的社交产品进行了升级。通过完善BIGO LIVE的社交功能，尤其是我们称之为Bar的异步分享功能的升级，我们在此季度更好地激发了用户、主播和粉丝之间的社交互动。因此本季度有超过50%的BIGO LIVE用户使用了Bar功能。展望未来，我们计划继续推进平台社区化和完善异步化内容，进一步优化平台上的用户对直播和社交的参与度。
Beyond its robust revenue growth potential, overseas live streaming also embraces more social features. For example, on average, 13% of BIGO LIVE DAUs hosted live streaming sessions every day in the first quarter, a far higher percentage than its counterpart in China. It is also higher than the voluntary upload ratio of many short form platforms in China. Such high level of user engagement validates the prevalence of live streaming as a form of entertainment and socialization around the world. Catering to users urge to interact, we continue to refine various social features in BIGO LIVE. For example, a sharing feature called Bar made it easier for users to share content through BIGO LIVE, and thus greatly invigorated the social interactions between users and users and between hosts and fans. As a result, over 50% of BIGO LIVE users accessed the Bar feature in the first quarter.
As we further optimize BIGO LIVE content sharing features going forward, we should be able to expand its user community and enhance its user engagement continuously.
另外一个方面，我们继续专注于Likee的发展。平台全球用户数量和变现能力都在持续提升。在2020年的第一季度，Likee的移动端总MAU达到了1.316亿，同比增长了121.9%，环比增长了14.1%。为了进一步丰富Likee的用户群，扩大全球布局，我们也加快了在北美、欧洲和日本等发达国家市场的用户获取。由于发达市场用户在在线娱乐消费平均要远远高于新兴市场，所以这一变化将持续为未来提高Likee的变现能力打下基础。
Beyond live streaming, we also make solid progress in our short form video platform Likee, which is the other component of our dual-growth engine. In the first quarter of 2020, Likee's total mobile MAUs increased by 121.9% year-over-year and 14.1% sequentially to 131.6 million. Also a historical high. Notably, we also accelerated Likee's user acquisition from developed markets, including North America, Europe and Japan. Because the average user spending on online entertainment in those developed markets is greater than in emerging markets, Likee's expanding footprints in developed markets is paving a clear path towards enhancing monetization going forward.
在提升Likee的用户增长质量外，我们还利用Likee在俄罗斯和印尼等市场的领导地位，与当地的媒体、人气明星、慈善机构和政府协作等建立合作关系，持续提升Likee的品牌影响力。值得一提的是，针对疫情导致的全球居家隔离，Likee成为我们帮助用户改善枯燥无聊的隔离生活的有力渠道。通过在平台上引入一系列创新的视频录制功能，我们为用户提供了在隔离期间迫切需要的娱乐和社交工具。以俄罗斯为例，我们与联邦青年事务局和人气明星联合起来，鼓励用户通过短视频分享隔离在家的生活。这项措施激发年轻人群体的防护意识，起到了强大的推动作用。另外，印尼Likee发起了云医疗诊所，为用户提供免费的在线健康咨询。我们邀请当地的医生和护士参与到Likee的在线挑战活动中，通过短视频向用户传授最有效的洗手方法，以及如何在疫情期间最好地保护自己，通过Likee的力量，帮助发展中国家用户抗击疫情。
In addition to its rapid expansion in developed markets, Likee is also forging ahead and boosting its social features and social influence in developing countries such as Russia and Indonesia. After we launch a series of new innovative video recording features into the platform, Likee served as a much needed channel for socialization and a prime source of entertainment as its users battles against boredom and isolation during the global pandemic. It has also leveraged its market leadership to establish new partnerships with local media outlets, popular celebrities, charity organizations, and government associations. In Russia, for example, we joined forces with the Federal Agency for Youth Affairs and popular celebrities to encourage users to share self-made videos about their lives under quarantine, so as to incentivize young generation to take more precautionary measures.
In Indonesia, for example, we launched the Live Health Clinic initiative to provide users with free online health consultations. As part of this initiative, doctors and nurses were invited to join Likee's online challenges and create videos to teach viewers the most effective hand-washing methods and how to best protect themselves against infections. Leveraging its global reach and local resources, Likee is making meaningful contribution to helping developing countries handle unexpected situations in a fun and informative manner.
接下来我会分享关于Hago业务的进展。一季度开始，Hago在区域商业化运营上以ROI为导向，强调有效流量占比。我们在印度主动收缩投放，因此整体MAU从去年Q4整体的3,300万收缩至今年Q1的3,100万。Hago持续探索用户的长期价值，也持续进行平台上的社交社区化探索，优先从兴趣爱好、生活动态、感情共鸣等内容切入，主打年轻人市场。借助内容不断丰满用户社交化像的同时，不断提升内容丰富度和多样性，持续挖掘和培养端内外优质内容生产者。同时，Hago借助算法分发、社交分发手段，提升内容分发的效率，协同群组强化圈层用户关系和品类优质内容的沉淀。借助派对party功能，实现基于关系链下的场景互动和商业变现。目前上麦互动率达到60%以上，用户生产消费内容和互动意愿强烈。这些升级让用户在Hago上除了享受休闲游戏的乐趣之外，能够不断地基于内容建立关系，并且持续互动，提升了平台的粘性，整体氛围更加朝活跃紧密的社群方向发展。这些有效措施让我们看到了Hago的留存提升、粘性和用户时长的提升，并且变现模型完整成型。而且目前二季度Hago的用户数也已经实现了超预期的增长。
Now let's turn to HAGO. During the first quarter, we assessed our operations and made the decision to take the long-term view, prioritizing those user acquisition efforts that will deliver a high-quality ROI. As such, HAGO's MAUs decreased to 31 million in the period from 33 million in the previous quarter. Notably, by reducing our marketing initiatives and investment in India, we were able to generate more effective user traffic and refine the quality of HAGO's user base. In line with our vision to maximize users' lifetime value, we continuously develop social features on HAGO to better connect users, stimulate social interactions, and cultivate a vibrant, engaging community with more diverse content and high-quality content creators. During the first quarter, for example, we began utilizing content based on users' live hobbies and personality types to better resonate with the younger generation.
Meanwhile, we refined the platform's recommendation algorithms and social media channels to augment its content distribution efficiency. We also upgraded HAGO's user group functions, which were formed around shared interests and thus have proven to be exceptionally fertile grounds for targeting our content distribution and enhancing the social connection between users. In addition, we launched the party chat room along with complimentary monetization features. Users were highly appreciative of this upgrade, and it provided them with a carefree digital environment through which they could communicate and socialize. Following these upgrades, more than 60% of HAGO's users have engaged in chat room interactions on the platform, while their willingness to pay for social features has also accelerated in turn. As the effectiveness of our value propositions continued to expand in the first quarter, HAGO's user retention rates, stickiness, and average time spent all grew on a year-over-year basis.
Moving into the second quarter, Hago's user expansion to date has exceeded our previous expectations. With our increasing complete monetization system in place, Hago has entered into a new phase of growth, and the stage is being set for the platform to become an extremely active, highly connected online community.
在国内业务方面，我们继续巩固YY Live在中国娱乐直播行业的领导地位。本季度为了确保我们的内容的多样化和高质量，我们继续发力优质直播内容的制作。例如我们在3月份推出了《爱豆周五见》，每周五组织高人气偶像演唱团体在直播间与粉丝上线互动。音乐、才艺和名人互动的结合对观众产生了很大的吸引力。我们未来也计划开发更多类似的直播节目。我们致力于拓展直播业务与营收结合的新形态玩法。例如，YY Live在本季度推出的《十点营业》主题活动，结合直播间的多项插件功能和场景，线上还原真实现下音乐派对的气氛。用户可以通过虚拟舞池、赠送特定的电费礼物等多种形式进行打赏互动。未来我们也会继续将技术与内容相结合，搭建强互动、强参与的内容场景和营收玩法。
On the domestic front, we continue to fortify our leadership in China's entertainment live streaming industry. To ensure the diversity and high quality of our content library, we doubled down our commitment to producing premium live streaming content in the first quarter. In March, for example, we launched Idol Friday, a weekly celebrity live streaming show featuring celebrity vocal groups who interact with their fans during live streaming sessions. The combination of music, talent, and celebrity excitement has proven to be appealing to our audience, and we expect to develop similar broadcasts going forward. We also focused on expanding our live streaming offerings through the integration of virtual events to heighten user engagement.
In the first quarter, we launched a series of events referred to as Open at 10 o'clock. By incorporating our platform's entire collection of popular live streaming tools, these virtual events create an engaging and authentic music party atmosphere for our users. Users love participating in these events as they are able to interact with each other on the virtual dance floor and exchange virtual gifts. In the future, we will continue to leverage our state-of-the-art technical capability to both heighten the allure of our content and pioneer new innovative methods of stimulating user interactions and user engagement.
另外，由于广大用户在疫情之间集体居家生活工作，从而在第一季度，YY的活跃用户数同比增长了21.7%，达到了4,510万。这些新加入的用户中，有一部分是被YY Live的易用性、直播质量和互动功能所吸引的，使用YY平台进行远程协作。我们也积极承担企业社会责任，疫情期间，YY Live推出了抗击新冠武汉加油的专题直播内容，每天7到12小时，总共推送过150多场专业媒体制作的直播节目。此外，我们与医疗机构合作，在疫情防控、心理疏导等不同角度进行专题直播共72场。
Regarding the epidemic's impact, YY Live also benefited from the ripple effects of stay-at-home and social distancing practices, with its active user base growing by 21.7% year-over-year to 45.1 million in the period. A portion of these newly added users leveraged the platform for remote collaboration, attracted by its ease of use, high live streaming quality, and suite of interactive features. In addition, YY Live also developed a special live streaming program focused on combating the coronavirus and supporting the city of Wuhan during the epidemic. Through this program, our special media teams produced and distributed an average of seven to 12 hours of targeted live streaming content a day, generating over 150 live streaming channels in total for our users. We also launched 72 live streaming sessions in partnership with medical institutions to provide users with virus prevention, education, and psychological consultations.
综上所述，我们在本季度持续专注发展公司的双增长引擎增长策略。虽然新冠疫情的全球爆发给大多数市场的宏观经济带来了巨大的不确定性，但是由于市场对优质在线娱乐内容和创新社交媒体网络的需求持续旺盛，我们并未受到过多的负面影响。此外，我们的业务的持续增长，以及我们产品生态系统本地化运营和先进技术的深耕，进一步证明了我们的长期战略的正确性。过去十年是中国直播市场成长和成熟的十年。我们相信未来十年将是直播和短视频平台帮助全球用户更好地连接起来的十年。我们会站在一个趋势的最前沿，我们将搭建平台，赋能用户，引领潮流，为全世界的人带来快乐和富有活力的使用体验。
In summary, we maintain a laser sharp focus on cultivating our dual growth engines in the quarter. While the global outbreak of the COVID-19 novel coronavirus has caused a significant amount of macroeconomic uncertainties in most markets, we remain relatively insulated from its negative impact as the demand for premium online entertainment content and authentic social engagement continues to grow. Moreover, our continuous business growth further showcase the validity of our long-term strategy, as well as the depth of our product ecosystem, localized operations, and cutting-edge technology. While the past decade was characterized by the growth and maturization of the domestic live streaming market, we believe that the coming decade will be known as the decade in which live streaming and short video platforms help to better connect users around the world. We will be at the forefront of this trend.
We will build the products, enable the users, and lead the charge to bring joyful and useful experiences to people around the world. That concludes David's prepared remarks. Now, as the JOYY CFO, I will talk about the financial results. We maintain our strong momentum and deliver robust financial and operating metrics during the first quarter of 2020. Our total net revenue for the first quarter increased by 49.6% year-over-year to RMB 7.15 billion, exceeding both the high end of our previous guidance range and street consensus. In particular, our live streaming revenues for the first quarter increased by 50.6% year-over-year to RMB 6.76 billion, driven by live streaming revenues growth from both HUYA segments and BIGO segments. The revenue in the first quarter increased by 33% to RMB 393.2 million, mainly driven by higher advertising revenues from BIGO.
Cost of revenues for the first quarter increased by 56.5% year-over-year to RMB 4.95 billion. Revenue sharing fees and content costs increased to RMB 3.55 billion in the first quarter from RMB 2.52 billion in the same period of 2019, which was in line with the increase in live streaming revenues. Bandwidth cost increased to RMB 528.1 million from RMB 297.4 million in the same period of 2019. Mainly reflecting the continued expansion of our overseas user base and time spent following the BIGO acquisition. Gross profits for the first quarter increased by 36% year-over-year to RMB 2.2 billion. Gross margin in the first quarter of 2020 decreased to 30.8% from 33.9% in the same period of 2019.
The decrease in gross margin was primarily caused by the fact that HUYA and BIGO segments had lower gross margins but contributed significantly greater portions of net revenues in the first quarter of 2020 compared to the corresponding period of 2019. Operating expenses for the first quarter increased to RMB 2.05 billion from RMB 1.22 billion in the same period of 2019, primarily due to the increase in sales and marketing expenses, which reached RMB 1.04 billion in the period from RMB 534.2 million in the same period of 2019. The increase in sales and marketing expenses was mainly attributable to our increased effort in sales marketing activities in overseas markets, as well as the impact of depreciation and amortization related to the consolidation of BIGO.
Our R&D expenses for the first quarter increased to RMB 722.2 million from RMB 404.7 million in the same period of 2019, mostly due to the increase in salaries caused primarily by the consolidation of BIGO. Our GAAP operating income for the first quarter was RMB 186.4 million, compared to RMB 473.6 million in the same period of 2019. Operating margin for the first quarter decreased to 2.6% from 9.9% in the prior year period as a result of a lower gross margin, the impact of depreciation and amortization related to BIGO's consolidation, and other overseas expansion initiatives. Our non-GAAP operating income for the first quarter, which excludes share-based compensation expenses, amortization of intangible assets from business acquisitions, as well as impairment of goodwill and investment and gain on disposal of subsidiaries and business, was RMB 613.2 million, compared to RMB 717.3 million in the same period of 2019.
Our non-GAAP operating margin for the first quarter was 8.6%, compared to 15% in the same period of 2019. GAAP net income attributable to continuing interest of JOYY Inc. for the first quarter of 2020 was RMB 386.7 million, compared to RMB 3.12 billion in the same period of 2019. The high GAAP net income in the first quarter of 2019 was mainly due to the remeasurement gain of the company's previously held interests in BIGO, amounting to RMB 2.67 billion. Net margin was 5.4% in the first quarter of 2020, compared to 65.3% in the corresponding period of 2019. Non-GAAP net income attributable to continuing interest of JOYY Inc. was RMB 428.9 million, compared to RMB 653.5 million in the same period of 2019. Non-GAAP net margin in the first quarter of 2020 was 6%, compared to 13.7% in the same period of 2019.
Diluted net income per ADS in the first quarter of 2020 was RMB 4.49, compared to RMB 44.55 in the same period of 2019. Non-GAAP diluted net income per ADS was RMB 4.8 compared to RMB 9.32 in the same period of 2019. Looking forward to the second quarter of 2020, we are faced with the continuous challenge of the COVID-19 epidemic. At the current stage, we expect our net revenues in the second quarter of 2020 to be between RMB 5 billion and RMB 5.15 billion, excluding the revenue contribution from HUYA in the same period of last year, representing a year-over-year increase between 16.7%-20.2% on a pro forma basis. We currently have limited visibility surrounding the epidemic's long-term impacts on our business and the market in which we operate.
Therefore, this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change. That concludes our prepared remarks. Operator, we would now like to open up the call to questions.
Ladies and gentlemen, we will now begin the question and answer session. If you'd like to ask a question, please press *1 on your telephone and wait for your name to be announced. For the convenience of everyone on the call, please ask one question at a time. If you wish to ask more questions, please rejoin the queue. When asking a question, please state your question in Chinese first, then immediately repeat your question in English. Thank you. Our first question comes from Thomas Chong from Jefferies. Please go ahead.
[Foreign language] Thanks management for taking my questions and congratulations on the strong set of numbers for BIGO. Given the strong Q1 in both top line and bottom line, how should we think about the full year KPI for BIGO in revenue as well as the bottom line in 2020? On the other hand, we have seen the geographical revenue contribution from developed market is also gaining traction. May I ask about what we should expect by the end of this year in terms of our geographical revenue mix? Thank you.
Thank you, Thomas. Let me address those questions. First question is regarding the revenue and profitability for BIGO. As you can see, in the first quarter, we did achieve very good growth in terms of user and revenue as well as profitability for BIGO. We expect that trend to continue. In total, I think the revenue forecast for BIGO will be higher than previous forecasted. I think we're looking somewhere around 65% year-on-year growth for BIGO in total for the revenue growth. In terms of the profitability, as you can see, BIGO LIVE's profit is well above 25%. I think in the next few quarters, we expect that profitability to continue or to even further optimize. On the Likee side, as we grow the user base of Likee, we will also enhance the monetization of Likee through the live streaming as well as the advertising. We expect the total BIGO profitability will also be better than we previously guide the market. I think that's very encouraging for the next few quarters. [Foreign language] In terms of the composition of the different markets, as you can see, in the first quarter, the developed markets contribution for BIGO's revenue is well over 33%. We expect that trend to continue. If we look at end of this year, we think the revenue from those developed market will be even higher. It will be higher on a quarter-by-quarter basis. It definitely will be higher than the current rate. We will also continue to expand in other markets, including the developed and emerging markets as well. Thanks.
Thank you.
Next question comes from Lei Zhang, from Bank of America. Please go ahead.
好，恭喜你们很强劲的业绩，尤其是海外这一块。我有两个问题，主要都是关于海外的。一个是想请教一下，我们怎么看海外这一块未来几个季度用户的一个趋势？因为Q1的话，不管是BIGO还是Likee的用户的数字都还是增长蛮强劲的。所以想看一下，尤其是疫情可能最近持续的时间比我们预想的长，你们觉得今年的用户方面会不会也是一个加速增长？还有想知道一下，用户这一块可以发达国家和发展中国家，或者是我们有一些新的区域，哪一块可能增速增长得比较快？我第二个问题还是老生常谈，想请教一下关于竞争的问题，除了我们可能跟TikTok的一直以来的一些竞争之外，想听一下我们有没有看到一些区域性的一些player可能也会发展比较快，尤其是有一些也是国内的公司出海的app，最近也有看到可能在印度和一些国家的用户增长的趋势蛮快的，所以想听一下管理层在竞争这方面有没有一些新的updates。谢谢，我自己翻译一下。Congrats on a strong quarter, especially in oversea. My two questions mainly about oversea. First is about the user trend in the following quarter amid the global pandemic. And also could you give us any color on the growth trend in different countries in terms of user? And the second is again about competition. Besides the competition with TikTok, do you see any new player or some potential player from the Chinese company that's going oversea may have a potential impact to our short video business in oversea? Thank you.
Thank you, Lei. Let me address the question. First one is about the user growth trend in overseas and impact from the COVID-19. I think in general, COVID-19 is positive for our global business because we see many countries that have implemented very strict indoor policy and isolation policy. As a result, people tend to have longer time watching online entertainment content, including live streaming and short-form video. As a result, we do see good user traffic, user time spent, as well as user retention rate across our live streaming and short-form video platform. We have also seen increasing percentage of iPhone penetration, because as I said, our key strategy for both BIGO LIVE and Likee focus on the new user growth from developed markets. I think given the continuous COVID-19 situation, we will continue to benefit from that trend. As I said, in general, our user growth profile from developed markets will continue to be higher than the rest parts of the world. That's the first question. The second question, I will address first and see whether David has anything to add. In terms of competition, I think apart from TikTok, we don't see any other major kind of competitor on the short video side, there is some regional player that is coming from China. In terms of the user scale, in terms of absolute revenue scale, it is still much smaller than BIGO. Apart from short video, also for live streaming, BIGO LIVE has achieved tremendous growth, over 90% year-on-year growth. We don't see any other competitor that is coming along, even to the similar growth profile as BIGO LIVE, so we're not afraid of the competition at all. [Foreign language]
对，我大概讲一下。第一个就是说，其实我们Likee在海外的短视频的用户的规模其实已经是非常大的一个规模了。所以我觉得我们会跟竞争对手进行差异化的竞争。我觉得在短期之内，我们更追求的是整个业务的健康成长，我们要收窄自己的亏损，同时保证自己有一个健康的成长的速度。在这个健康的business model和成长速度之间，我们会找到一个平衡，使得我们的业务在更长的时间内具有更长的竞争力，而不是在短期内去烧大规模的钱。对。
This is David. Let me head on based on Bing's comment. Firstly, in terms of the overseas short video competition, I would like to say, after two years effort, actually Likee's overall user scale has been grown very big. Actually the mobile MAU has been grown over 100 million users. In the future, we intended to have more differential approach in terms of the competition. We will make a well health balance between the investment into the short video business as well as the growth speed. In order to make a more healthy model to support a more longer time of sustainable of the competition.
对，然后在这个直播领域，我觉得我们在全球是看不到什么竞争对手的，而且能够在全球建立30多个office，在每一个地区都深入化本地运营的公司和这种管理能力，我们没有看到任何的竞争对手。
In terms of the live streaming business, we actually didn't see any of the established competitor outside of China. After four years of the effort, BIGO already set up more than 30 offices outside of China. In terms of those kind of scale of the business as well as the operational expertise, we don't think other local based peers can compete with us.
然后在短视频方面，我觉得短视频实际上是一个整个公司的综合竞争力的体现，从研发到运营，到用户获取，到市场宣传，我觉得是一个竞争门槛特别高的业务。其实大家也能看到，目前在全世界也就是我们和TikTok两家能够在短视频领域取得一个巨大的成就。所以我不认为一般的公司和小规模的投入能够进入这个领域。
In terms of the short video arena, we truly believe it really depends on a company's comprehensive competitive capabilities, including technical capability, operational capabilities, the user acquisition capability, as well as other brand promotion capabilities. If you look at the global short video business market outside of China, only Likee and TikTok are two of the major established platforms. Going forward, we don't think in terms of the short video business, we will see the very established competitor come out in the short time period. Thank you.
Thank you.
Our next question comes from Natalie Wu from CICC. Please go ahead.
谢谢管毅成接受我的问题。我的问题也是关于BIGO。就想问一下，在去年年初的时候，咱们收BIGO的时候，大家都说要在海外再造一个YY。那按现在的runway来说，下半年可能就要达到这个目标了。不知道管毅成对于更长期的一个发展上头有没有一个想法？如果可以的话，比如说分LIVE和Likee的这个形态、用户数、收入之类，有没有一个两到三年的目标？这个是第一个问题。第二个的话，就想了解一下，在未来的中长期内，比如说两到三年内，Likee会长成什么样？那比如说相对于TikTok来说，Likee这边会有一个怎么样的一个自己的特点，去定位用户目标之类，跟TikTok有一些differentiation的地方。I will translate myself. So I have two questions regarding BIGO. First one is, we acquired BIGO earlier last year.
The aim was to create another YY in global market. Now that the target has almost achieved, seems that BIGO revenue could surpass that of YY later this year at current run rate. Just curious if there's a longer term target that management can share with us regarding the overseas endeavor, say, user or revenue, et cetera, in two years, both in terms of BIGO Live and LIKEE, respectively. Second one is regarding LIKEE. Just curious, how do you differentiate LIKEE versus other short-form video social platforms in overseas market, like TikTok. Let's say, in two to three years in terms of regions, position, user target, et cetera. Thank you.
Thank you, Natalie. Let me address the first question, and David can address the second one. In terms of the overseas potential, we see enormous potential out there. As I said in the script that we look at BIGO LIVE, first of all. BIGO LIVE penetration into developed market is going very well. We think in each of those big four developed market area, including North America, Europe, Middle East, and Japan, Korea, we think there's opportunity to create another similar scale of YY Live in each of those four areas in the next several years. If we put those together, that means there will be at least four times of the current YY Live revenue scale in overseas market, for BIGO LIVE. That's a very exciting market potential. For LIKEE, we think LIKEE's user will continue to grow.
As I said, we will convert those users to live streaming. Also, going forward, we also implement advertising dollars. We think given the market user potential and the spending power in those market, Likee can generate another similar scale of Bigo Live. Right. A short answer to you that we think there's multiple times opportunity in overseas. Actually, we are at a turning point that you can see that the acceleration of Bigo Live's revenue demonstrate we can capture that enormous market opportunities.
This is David. Let me add on that. Firstly, in terms of Bigo Live, as I said in my prepared remarks. Going forward, we'll continue to focus on four key areas to continue to increase live streaming revenue.
In each of the market, we will quite confident we can build up revenue size, which is at least in the similar size as our China live streaming business. In generally speaking, in terms of the overseas live streaming business, we were quite optimistic on that. In terms of the short-form video business, Likee. Since Likee is starting from a short-form video editing tool apps, and it will also continue being one of the best in terms of the short-form video editing capabilities. That is why if you look at the Likee's daily users upload rate for the short-form video, actually has been continuously exceed 10%, which is much higher than other similar peers in the market. Likee has very obviously community features compared rest of the short-form video platform in the market.
We truly believe in the future, we'll continue to focus on the development of the community features for Likee, and it will improve the user stickiness as well as the user interactions. After the Chinese New Year, for this year, we start doing the Likee's monetization. We truly believe approaching to the end of this year, definitely, Likee can build up sizeable revenues for this year, and next year will continue grow healthily. Obviously, everybody knows we have a very strong competitor in this arena, right? Since Likee will continue to focus on building up a more healthy business model in this year, so we are still quite confident we can continue being a very established competitor in the next three to five years for the short-form video competition. Thank you.
Got it. That's very encouraging. Thanks Xuel ing and Jin Zhong for the cover.
Thanks。
Our next question comes from Tian Hou from T.H. Capital. Please go ahead.
Yeah. Xuel ing and Jin Zong, and Matthew, good morning. [Foreign language] [Foreign language] As we expand our overseas practice rapidly, the marketing dollar will also matching up. I want to get some clarification on the full year operating margin trends. The second one is specifically regarding the split between the platform and the host overseas. Is that a similar to what we do in China? Thank you.
Thank you, Tian. Let me address those two questions. First one regarding user acquisition. In general, the overseas user acquisition cost in many markets are lower than in China. That's the first point. Secondly, given the COVID-19 situation, some of those countries, the acquisition cost is actually even lower, which is good for us. Looking into second quarter, third quarter, if the COVID-19 situation getting better, then the user acquisition cost might increase a little bit. Still in general, it's much lower than in China. If look at the operating margin profile for BIGO. BIGO is hugely profitable. As I said, it's well over 25%. In the future, I think that margin can trend up as well, given economy of scale and then the enhancement of the payment channels, etc. For Likee, it's still burning money, but as David already mentioned that we focus on ROI, we focus on self-sustained growth. We are expecting the break-even for the total BIGO segment will come sooner than we previously guide. Which means the operating margin, the net margin profile for the total BIGO will be better than expected before. That's the first question. Second one, for the revenue sharing percentage for the host. In general, overseas, it's lower percentage than in China. China, typically, we're sharing 45% revenue with the host and the guilds. In overseas, because BIGO LIVE has no competitor, as we said, so its negotiation power is much stronger as a platform compared with individual hosts. The guilds is still very early stage in overseas market. As a result, the host rely more on the platform rather than the other way around. That's why we share less revenue with the host. Thanks.
Thank you.
Our final question will come from Daniel Chen from J.P. Morgan. Please go ahead.
早 上 好 ， 管 理 层 。 这 是 我 的 问 题 。 我 想 问 一 下 ， 因 为 现 在 Q2 度 海 外 疫 情 还 是 比 较 厉 害 ， 就 想 问 一 下 ， 那 我 们 的 这 些 头 部 土 豪 在 中 东 、 欧 美 这 些 地 区 有 没 有 受 到 影 响 ， 就 他 们 的 付 费 ， 还 是 说 我 们 其 实 是 像 Xue Lin Zong 说 的 ， 比 较 全 面 直 播 ， 那 所 以 我 们 这 一 块 的 影 响 确 实 比 较 小 。 I will translate myself. My question is related to top spender behavior in overseas market. Right now, the COVID-19 is still ongoing. I was wondering if the top spender in our top revenue contribution areas like Middle East, U.S., Europe is going to be impacted or if our revenue in the overseas market is more diversified, so more long tail payers, so it will be less impacted due to the pandemic. Thank you.
Let me address your question. [Foreign language]
我来讲吧。我觉得因为我们刚才讲了一个数字，就是说我们在海外直播的开播率是13%，这意味着我们在整个平台上13%的人是主播，87%的人是观众，对吧？所以这个比例实际上是非常高的。如果跟正常的一个国内平均的水平比，我觉得应该是高出将近八倍到十倍的这个数字。那么如果是跟短视频的上传率相比，我们甚至比短视频平台的上传率还要高。所以大家可以通过这个数字能够理解一下，就是说海外直播的生态和中国直播的生态是非常不同的，甚至有可能说是两个完全不同类型的平台。所以我们的主播是非常diversified的，就是各种各样的类型都有，而且不是以集中的播出为主的。所以在这样的一个生态环境下，我觉得头部主播对我们的影响会非常低。所以我们的业务不太受疫情的影响。
This is David. Thank you for your question. Let me address that. I mentioned a figure during my prepared remarks, which is, average 13% of BIGO LIVE DAU actually host the live streaming sessions every day in the first quarter. This level actually is much higher than its counterpart in China, and would even compare with the Xiaohongshu video platform. In general speaking, even for the Xiaohongshu video platform, they have a much lower ratio compare with us in terms of the host who open the live streaming sessions. That actually demonstrates the overseas live streaming ecosystem actually are quite different compared with the China live streaming ecosystem. The hosts actually are more diversified, it actually covers a different part of the live topics. Also the ecosystem is very different. Based on that, we are still quite confident we will have very limited impact from the other environment impacts such as COVID-19. Yeah. Thank you.
Thank you.
Thank you. I will now pass back to management for closing comments.
Yes, thank you, operator. Thank you for joining our call. Again, we wish everyone stay safe and sound. We look forward to speaking with everyone next quarter. Thank you.
Thank you.
Thank you so much.
谢谢。
Ladies and gentlemen, that does conclude the call today. Thank you so much for your attendance. You may now disconnect.