By Tracy Qu

A little-known but fast-growing Chinese tech company is carving out a niche in the crowded social media market, winning over LGBTQ users to fuel its expansion.

Newborn Town, which is listed in Hong Kong and operates China's most popular gay dating app, Blued, has been working to expand internationally with its overseas brand.

"We will draw from our experience in China, see if we can build up a profile in Southeast Asia, Japan and South Korea," Chief Executive Li Ping said in a recent interview with The Wall Street Journal.

LGBTQ business now accounts for about 20% of Newborn Town's revenue, said Li, who co-founded the company over a decade ago with business partner Liu Chunhe, who serves as chairman.

LGBT Capital, which specializes in LGBTQ market research, estimates the global spending power of the community at around $4.7 trillion annually, based on a population of roughly 388 million individuals aged 15 and above.

Newborn Town acquired BlueCity, the Chinese tech company behind Blued, in 2023. It then introduced an overseas version, rebranded as HeeSay, which has been making inroads in Asian markets.

Blued is recognized in the community as the first homegrown gay dating app in China, said a gay man living in Southern China who wanted to be identified as Casper. "Gays rely heavily on apps to date," he said, with many users hitting the apps in search of casual hook-ups.

HeeSay has averaged 1 million monthly active users over the past three months, gaining popularity in countries including India, Pakistan and the Philippines, according to data from market intelligence firm Sensor Tower. That is a modest tally compared with the over 14.5 million monthly active users on Grindr--the world's most widely used gay dating app--but analysts say there is room for growth.

Revenue from Newborn Town's "diverse-audience" social networking business outside of China rose 25% year-over-year in the first half of 2024.

On top of the usual dating app profile-swiping, HeeSay has a dizzying array of features, including games, chat rooms and livestreaming. A limited range can be used for free, while a paid membership unlocks perks such as a "burn after reading" function to send photos that self-destruct after three seconds and a map that shows online users nearby.

Analysts at Citic Securities say that Newborn Town's Blued app has the potential to keep growing steadily in China thanks to its dominant market share. They also see scope for HeeSay to expand in overseas markets, supported by its live-steaming features.

Citic Securities has a buy rating on Newborn Town, which has been on an upward trend in recent quarters. Revenue surged 65% year-over-year in the first six months of 2024, and the stock has skyrocketed over the past two quarters, bringing year-to-date gains to nearly 150%.

Li attributes the company's success to a strategy he calls "bush style." Instead of creating a single super app with multiple services, it goes for distinct apps tailored to consumers' needs. Flagship products include social networking app Mico, group voice-chat app YoHo, and TopTop, a social gaming app inspired by the Middle Eastern tradition of socializing over hookah.

To be sure, Newborn Town's ambitions are facing policy headwinds. Chinese tech companies expanding abroad are coming under increased scrutiny from foreign regulators amid rising geopolitical tensions. Entering new markets has become more complex as countries tighten rules on data, national security and investment screening.

"As a commercial company, we can't really influence the direction of geopolitics or anticipate what may happen next. Our focus is to identify business opportunities--as long as the situation is compliant, we move forward," Li said.

The CEO plans to keep exploring opportunities to expand Newborn Town's app empire in Japan, South Korea and Europe.

"I think we are becoming more confident now. We are doing better and it's a natural progression," Li said.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

June 06, 2025 05:26 ET (09:26 GMT)

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