77. The Economics of Online Dating

Source: Cosmopolitan

Online dating has revolutionized the way we view dating as a social phenomenon. More and more people are joining dating sites in an effort to find ‘true love’. A study conducted by EHarmony on couples married between 2005 and 2012 showed that about one-third of them had met online. Half of that one-third had used an online dating site.

However, the dating world is a business, with its market. Various factors are propelling the growth of online dating services. First, the rise in the youth population, particularly, the increase in single and unmarried people across the globe. According to the 2011 Census of India, 85 million urban Indians were single. This represented a market ready to be monetized. Second, the rise of social media marketing to promote several facilities have also led to the rise of dating sites. Online dating apps such as Tinder, Hinge, and Bumble are a hit among the millennials. These young adults are increasingly shunning societal stigmas associated with Indian society and joining online dating platforms.

According to Statista, Indian online dating companies are expected to show a compounded annual growth rate of 10.3% over the next four years, with a market volume of $20 million by 2022. Tinder, is the third-largest grossing app on Android in India, with monthly revenue of more than Rs. 1-2 crores. These are not small numbers!

With more and more people from the Tier II and Tier III cities being affected by the impacts of digitalization, we can expect a tremendous rise in the user base of these dating apps. TrulyMadly claims that 40% of its users come from outside the Tier I cities. However, after the growth phase is over, it is important to observe how the apps perform, financially. The main source of revenue for these dating apps is subscriptions, followed by ads. Even so, a sustained future for these apps is not given.