Meitu, 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 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.
Shares in Meitu closed up 4.6 percent at HKD 3.45 on Wednesday, well below its HKD 8.5 IPO price.
© Thomson Reuters 2019