The crisis in the technology industry continues and this time it affects the business of love. Match Group, the company that owns dating apps such as Tinder, Meetic, OK Cupid and Hinge, announced last February the layoff of 200 workers from its entire workforce globally, that is, 8% of its entire workforce. job.
Among the reasons are the poor economic results and the poor performance of Tinder, the most used digital matchmaker. For this reason, Match Group has drawn up a strategy that has two objectives: to attract new users, especially among the younger generations, and to contain the rise of Bumble.
the ears of the wolf. Bernard Kim, CEO of Match Group, communicated in a telematic meeting, held a few weeks ago, that 2022 was a difficult year, with results below expectations. According to Kim, despite the company’s existing financial discipline, Match Group must take “decisive steps” toward restructuring in order to ensure long-term economic growth.
Less income. Likewise, in a letter addressed to the company’s shareholders, signed by Bernard Kim and Gary Swilder, CEO and CFO of Match Group respectively, the company reported that last year it obtained revenues of 3.2 billion dollars, 7% more than the previous year but “well below” what was initially planned by the company.
Poor Tinder performance. In this sense, the text added that the causes of this reduction were due to the impacts at the macroeconomic level in the foreign exchange market, a decrease in consumption and a weakening “greater than expected in the productive execution of Tinder”, which was it intensified as the year progressed. Therefore, the company communicated a new plan to improve the performance of the application.
More marketing. Match Group said Tinder will launch its first “global marketing campaign” this year. The firm noted that the world’s most downloaded dating app grew rapidly thanks to word of mouth, so it was never necessary to establish a marketing strategy for Tinder.
For the young. Now, however, the situation has changed and the most popular digital matchmaker fails to convince the younger generations. Therein lies the challenge, persuading Generation Z, as Gary Swidler pointed out in an article published by the Financial Times last August.
Fewer people join. Additionally, in that same Financial Times article, Swidler indicated that the number of new registered users had not returned to pre-pandemic levels. “New users are challenging,” he added, noting that the company needed to offer something new to convince them to use the app. That is one of the reasons for this slowdown in Match Group dating applications: whoever wanted to use them already has them, and whoever was previously uninterested does not now.
From the “Guadiana effect” to the economic crisis. Along these lines, Borja Adsuara, an expert in law, strategy and digital communication at the University of Villanueva, recently pointed out to Cadena Ser two other reasons for the decline of Match Group. On the one hand, “the Guadiana effect” in a context of generalization of the application in question, that is, people who use said ‘app’ for a while and, when they achieve their goal, stop using it until they go back to look for a new one. flirt. On the other hand, the economic crisis that reduces the possibilities of users to pay for the improved version of the applications.
A tough rival. And while Match Group calculates to have losses in 2023 estimated at 6 million dollars, Bumble, the dating application founded by Whitney Wolfe Herd (co-founder of Tinder) seems to be on the right track. The latest economic report from the firm indicated that revenues had increased by 16.7% and that the number of users using the paid version increased by 14.4%. There is one of the objectives of Tinder’s strategy for this year: contain the growth of Bumble.
Love is not easy. In short, Match Group has encountered an unexpected context in which, in addition, Bumble is taking a piece of the cake from it. Freddy Mercury said in ‘Somebody to Love’ that he would not give up. We’ll see if Tinder manages to avoid defeat.
Imagen: Good Faces Agency / Unsplash
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