In 2015, three of China's four dominant matchmaking websites announced plans to raise funds on the capital markets as they venture into new businesses to boost revenue. The online matchmakers have been struggling over the last few years as they shift their business model from charging users fees. Instead, they are trying out several new businesses, including marketing goods and services to their large user bases and opening brick-and-mortar offices that offer more elaborate - and expensive - matchmaking services. Still, analysts wonder if these investments will pay off.

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China's New Third Board, a platform for small, unlisted high-technology companies to secure financing through off-exchange share trading, witnessed participation on November 20 of the Beijing-based Baihe Co Ltd which operates matchmaking website baihe.com.

Baihe is not the only online matchmaking giant to be active in the domestic capital market. On November 13, Beijing Youyuan.com Co, which runs matchmaking website youyuan.com, also announced that it had applied for an IPO on the domestic A-share markets, according to its prospectus.

On March 3, Beijing-based Jiayuan.com International Ltd, which runs leading matchmaking website jiayuan.com, announced that it had applied to be delisted from the US-based NASDAQ Stock Market, according to a statement posted on its website.

Like many other companies, Jiayuan is delisting in the US with the intention of going public on the Chinese mainland, said Zhang Yi, CEO of Guangzhou-based iiMedia Research, an independent consultancy that focuses on the mobile Internet.

"All of those companies urgently need to broaden their financing channels," Zhang told the Global Times on Monday.

China's online matchmaking market has been developing steadily over the last few years, but many of the largest players have begun to lose money as competition heats up.

Baihe reported a loss of 135,000 yuan ($21,100) in the first four months of 2015, after losing 37 million yuan in 2014 and 33 million yuan in 2013, Securities Daily reported on November 30.

Jiayuan lost 10 million yuan in the first quarter of 2015, but got in the black in the third quarter, earning 14.9 million yuan in net profit, according to its financial reports.

Zhang said that online matchmakers like Jiayuan and Baihe are raising cash on the financial markets to invest in a new, altered business model.

"The cost of such adjustments is very high; however, their prospects remain uncertain," he said.

The old model

Currently, China's online matchmaking market is dominated by Baihe, Jiayuan, Youyuan and zhenai.com. Jiayuan was the first to enter the market in 2003, followed by Baihe and Zhenai in 2005, and Youyuan in 2008.

Until recently, the four sites made their money in much the same way - from user communication fees. Essentially, users have to pay if they want to contact other people on the site, said Yang Xin, an analyst at Beijing-based market research firm Analysys International.

Wu Jiayi, a white-collar worker in Shanghai, registered on Youyuan in April. "The basic charge is 50 yuan a month if I want to talk with other users," she told the Global Times on Monday.

This profit model used to work well, but over the years, problems have emerged. With the emergence of more and more social network websites and apps such as WeChat and Momo - two popular mobile chat apps in China, traditional matchmaking websites look increasingly "outdated," Zhang said.

"Why should I pay to make friends with strangers, when I can find a bunch of them for free on apps like WeChat?" he asked. 

Yang also noted that the fee-based business model is short-sighted.

"When user finds a boyfriend or girlfriend on the website, they don't need the service anymore," she said.

"Therefore, it's easy for these sites to gain users, but it's also easy to lose them. As competition intensifies, the websites need larger, more stable user bases."

Monetizing users

In recent years, the online matchmakers have sought to find new ways to make money. Baihe, for example, stopped charging user communication fees on May 22, effectively allowing its users to talk with each other for free, Beijing-based newspaper Worker's Daily reported on May 23.

"This move will have a great impact on the domestic matchmaking websites that rely on user communication fees as a large part of their revenues," said Wu Yujing, an analyst at Beijing-based market research consultancy iResearch.

Yang said it's a bold move for Baihe because user communication fees account for about 23 percent of its total revenue.

But canceling the communication fee is just part of Baihe's strategy for building a "matchmaking business network" by collaborating with other companies which want to market goods and services to its users.

In April, it teamed up with Beijing-based electronics retailer GOME Electrical Appliances Holding to launch a home furnishing website called gomehome.com, sina.com.cn reported on April 8. Baihe users can receive special furnishing services if they log onto gomehome.com through a link on baihe.com.

Baihe has also forged deals with several personal investment websites, such as Beijing-based yindou.com.

"Baihe is working with these other companies to broaden its business from just matchmaking to other things like wealth management and home furnishing. But because such cooperation requires a large user base, Baihe abandoned its user communication fee to attract more users," Yang said.

Exploring the off-line market is also Baihe and Jiayuan's strategies for boosting their revenues.

Over the last two years, Baihe has opened 100 brick-and-mortar matchmaking offices and Jiayuan has opened 99 offices, according to the companies.

"The offices can charge clients a lot more than the websites, which can make them a strong supplementary source of income for the websites. The offices can also raise the company's profile with the public," Yang said.

"All these adjustments require money, and that's why these matchmaking websites, other than maybe Zhenai, have been active on the capital market this year," Zhang said. 

Risky propositions

Still, industry analysts weren't convinced that these new businesses will pay off. Zhang said that opening brick-and-mortar locations might be a bad idea for Internet companies.

"Do Internet companies have the experience to manage off-line stores? I don't think so," he said.

Likewise, the online matchmakers' effects to grow their user bases remain unproven.

According to Yang, after Baihe stopped charging its user communication fee, its user base should have grown dramatically. But recent data that her company has gathered shows that the number of Baihe users has actually dropped.

"I think it's a good thing that these companies try to explore new businesses, but they have to be cautious about entering too many new areas," she told the Global Times.