500.com struggles to catch up with market

China’s online sports-lottery operator, 500.com Ltd, reported a 44 percent drop in operating profit in the fourth quarter last year as it struggles to catch up with the pace of the market.

Despite the company finishing the year “on a strong note” with a 52.1 percent year-on-year quarterly increase net revenues, said CEO Man San Law, the company’s operating profit plummeted to $3.1 million. The number of active users to the site increased just 10 percent in the fourth quarter last year compared with a 19 percent increase in China’s lottery ticket sales in December, a sign of a competitive market, said an analyst based in Shanghai.

“500.com’s sales are not growing as fast as the market. Its first-quarter guidance is also weak. It has lost market share to competitors like Alibaba’s lottery site, while NetEase is getting more aggressive,” Nick Ning, an analyst at 86Research Ltd., told Bloomberg.

 

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