China selfie app firm Meitu forays into skincare to counter drop in users

Meitu

17/04/2019 10:35

SHANGHAI, April 17 (Reuters) - Meitu Inc  1357.HK , the
Chinese firm best known for its selfie image-enhancing app, said
on Wednesday it is venturing into the offline skincare market as
it attempts to offset the impact of dwindling app users and a
money-losing smartphone business.
    Meitu, which listed in late 2016 in what was then Hong
Kong's largest tech IPO in a decade, has since suffered losses
and its share price has more than halved, as China's smartphone
market has run out of steam, shrinking nearly 16 percent in
2018.
    The firm announced a deal in November to outsource
manufacturing of the smartphone business to Xiaomi Corp
 1810.HK  and receive brand and tech licenses in exchange.
    Meitu said on Wednesday it will launch a face-cleansing
brush that can automatically identify the best pulsing setting
for a user by detecting his or her individual skin condition.
    The company's beauty-centric camera apps, which exploded in
popularity in China around 2015 thanks to strong demand from
female users, have recently endured a steep decline in usage.   
     In its earnings report covering the six-month period to
end-December, Meitu said monthly active users across its suite
of apps decreased 19.9 percent from a year earlier.
    Its smartphone division, meanwhile, made up most of the
company's sales over the same period, but high costs brought the
company to a loss overall.
    Slowing smartphone sales and a softening economy have placed
pressure on domestic smartphone makers, who are increasingly
raising prices in hopes of boosting margins.  urn:newsml:reuters.com:*:nL3N20M2V6
    Shares in Meitu closed up 4.6 percent at HK$3.45 on
Wednesday, well below its $HK8.5 IPO price.

 (Reporting by Josh Horwitz; Editing by Miyoung Kim and
Muralikumar Anantharaman)
 ((Josh.Horwitz@thomsonreuters.com;))