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Virtual dating rise as users seek lockdown love, says Match chief | #tinder | #pof | romancescams | #scams

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A pandemic lockdown with millions confined to their homes and physical distancing enforced should have been a disaster for the dating app business.

But according to Sharmistha Dubey, the new chief executive of Match Group, owner of dating groups including Tinder, OKCupid and its namesake Match.com, the reality has been quite the reverse.

While users initially shied away from using the apps at the start of lockdown, said Ms Dubey in an interview with the Financial Times, online dating has since exploded, with the average number of daily messages sent across all of Match’s platforms increasing by nearly 30 per cent in April, compared with the end of February.

In particular, users are taking advantage of new video chat features in many of Match’s flagship apps that allow them to go on virtual dates without leaving their houses.

“We’ve launched in different formats, and for whatever reason, consumers [had] never adopted it in any sort of meaningful way — until Covid happened,” said Ms Dubey, a Match veteran who has held positions including chief product officer and, until recently, president.

“It now provides us a real opportunity to create much richer online dating experiences,” she said, adding that the group plans to roll out the feature on Tinder in the near future.

The pandemic has also brought about a shift in the gender dynamics of dating apps. While the platforms have long attracted men in droves, the success of many has depended on wooing — sometimes wary — women to sign up.

But the new reality of virtual dating has changed that, said Ms Dubey.

“By the time April came around?.?.?.?we started to see a particular surge in activity, especially among the young, and especially among women,” said Ms Dubey. 

“The pace of dating is different by age, certainly, but definitely by gender. [And] women did feel a little bit more liberated, having more conversations with more people and more engagement without the pressure of having to meet in real life.”

Ms Dubey took over as chief executive of market leader Match at a tumultuous time. Starting in March, in her first three months she has been tasked with navigating the internal disruption of a global pandemic and managing a spin-off of the group’s shares from holding company IAC — all while seeking to capitalise on changing dating behaviours at a time of social distancing. 

Already, Match — whose platforms generally make money through subscriptions or fees from premium features — posted a slowdown in the pace of growth in the first quarter to $545m, citing “lower levels of new users signing up and propensity to pay” due to tough economic conditions.

Analysts forecast full-year revenues will rise around 10 per cent, according to S&P Capital IQ, compared with a 19 per cent increase in 2019.

It comes as the already dog-eat-dog $7bn matchmaking market becomes increasingly competitive, with social media behemoth Facebook starting to roll out its own dating service in some regions from 2019.

Indeed for an industry focused on helping users find love, the matchmaking world does not necessarily have a history of playing nice: last week, Match and rival Bumble settled all litigations following a series of tit-for-tat lawsuits centred around allegations of patent infringement and trade secrets theft.

Match is also currently being sued by the Federal Trade Commission for allegedly duping thousands of users into subscribing to its sites by allowing scammers to send them fake expressions of love via email. Match has called the claims “outrageous”.

When Ms Dubey started at Match nearly 15 years ago, less than 3 per cent of marriages in the US started online. Today, that number is well over 40 per cent, she said, adding that the group has plans to continue expanding globally in untapped markets, particularly in Asia.

Analysts share her optimism. “We believe Match’s highly profitable business model and significant scale advantage will allow the company to remain the industry leader,” Brent Thill, analyst at Jefferies, wrote in a recent research report, although he warned of near-term volatility in the share price as the spin off from IAC — which owns around 80 per cent of the group — completes at the end of the month. 

After taking an initial dive earlier this year due to the pandemic, its shares have now fully recovered and are currently nearing all-time highs at around $92. 

Young female users on Tinder are driving growth in the crisis; Change in daily average swipes since Feb 29 (%)

For Ms Dubey, the new video chat features have been a major area of focus, since they increase engagement but also help to boost revenues more directly, by attracting new subscribers.

As with large social media platforms, user safety is a “heavy area of investment”, Ms Dubay said, both in terms of human moderators but also artificial intelligence technology. While each app has its own designated teams, Match has a centralised system so that bad actors on one platform can be found on others and blocked, for example. 

But the shift to video introduces new moderation challenges due to its live format. So far, Ms Dubay said, the group is focused on introducing “prequalification” requirements — whereby people must message back and forth a number of times before they are allowed to video chat — but also “brainstorming” other safety features in the space. 

It is not just coronavirus that is shaking up the scene. New entrants such as Silicon Valley’s Coffee Meets Bagel are springing up, each promising a new niche or inviting format for daters. As a $26bn parent, Match has the advantage of being able to scoop up promising start-ups: such as the 2019 purchase, Hinge.

But one newbie is too big to buy. When Facebook announced plans in 2018 to launch a dating service to its 2.6bn-strong user base, the news knocked Match’s shares by more than 20 per cent.

Ms Dubey said Facebook has not hurt its business in any of the markets where it has launched. This is partly down to first-mover advantage — “we started this category, we evolved this category, we’ve disrupted this category,” she said — but also because the dynamics of dating are such that it is not a “zero-sum game” for app makers.

“When people are ready to date, in general, they’re dating. They are on three to four apps,” she said.

In some ways, Facebook could be a boon to the company, she added, since its entry into certain markets will help tackle stigma associated with online dating at a time when Match has global ambitions.

“We think Facebook could actually be very helpful to us and opening and broadening users to start using it,” she said.

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