Miranda Zhuang : I want to pull up management’s comment on this year’s strategy, which is to increase the overall traffic and also to be perhaps support for the verticals traffic. So my question is, can you share your outlook for the user growth in the second half and also your operational strategies to boost the user traffic and then the vertical content areas?
Gaofei Wang : So first, let’s talk about the scale of user. So first of all, everybody is aware that the shipment of the handset in the first half of year experienced a decline of about 10% year-on-year. And also as a result, the marketing expenses relevant to that was also decreasing. So our focus for this will be, first of all, increase the efficiency of the traffic. And second of all, focus on those high ARPU value clients, especially the traffic supporting those iPhone users and Huawei smart phone users as well. And also in Q2, you can see more activities of the — and also still we are going to focus on the recovery of the traffic, especially from 2 areas, 1 is culture and entertainment. The other is the news and hot trends.
So in Q2, especially talking about the activities of the culture and entertainment industry, we’ve been seeing more activities organized, for instance, the movies and theaters and also variety shows, as well as the concerts et cetera. So we had a very clear trend of the recovery and increase of the traffic in July and also August as well. This was mainly due to for instance more activity in the entertainment industry in the summer holiday season and also in the first half of this year as a whole we’ve been seeing over 20% of the growth for the interactive users number in the entertainment industry and also 50% growth versus the pre-COVID period, so that we are going to have a very good trend getting from that particular industry. And also in the second half of the year, we’re going to focus first on the overall recovery of the traffic efficiency.
And also second is that give more support to those different vertical content and verticals as well. So I’ve been already sharing with you some of the colors related to handsets industry and also the vertical of automotives, which we had a great investment of traffic for the past 1 and 2 years. And so in 2023, we have been seeing that the overall percentage over the traffic contribution to our total traffic from the handset and also the automotive industry has already been doubled versus the pre-COVID period, so that because of this very good trend and also a better kind of a revenue, commercial revenue and also influential power increased, we are going to see more and more significance of the handset and also automotive vertical, so that we can give more vertical support, traffic support to these two verticals.
And also, next thing I would like to talk about are — for the verticals of the cosmetics and personal care and fashion industry, as well as the vertical of travel. So I know before the COVID period or during the COVID period, people or users actually demand over these different products of these verticals actually declined. And also, we had experienced a severe competition during the COVID period. So when the COVID control policy was just alleviated sorry, was just alleviated — was just alleviated, we can see that the kind of performance and also the traffic contribution percentage from these kind of industries are accounting for only half of the total traffic contribution percentage before the COVID period. So in the first half of the year, we had already — we have already done something to actually support the operation from these — to these different verticals and also now a very good trend is that the fashion vertical have already recover their traffic percentage contribution to our overall traffic to the period before the COVID.
And also, in terms of the luxurious industry, the revenue from this luxurious industry actually was increasing and to a positive trend. And also for the cosmetics and also the travel, still we have been seeing a gap if we’re comparing with the situation before the COVID. So as a result, you can see that the overall kind of revenue from the verticals of the cosmetics had a year-on-year decline. So these will be still the verticals that we are going to laser focus on our operational support in the second half of the year. And also because when we had a very good recovery from those less-than-expected growth verticals, it is going to give us more influence and also we are going to optimize the total structure in terms of the traffic contribution to our overall traffic, so that’s how we can regain to a positive momentum of growth.
Operator: And the next question comes from the line of Daisy Chen from Haitong International.
Daisy Chen : My question is about the AIGC, can management share more color about the deployment application scenarios into the product planning in AIGC and what are your current state of the movement, project?
Gaofei Wang : So I think that during the last quarter earnings conference call, we had already answered part of this question. So AIGC of Weibo has 2 functions versus that we are going to enhance the production speed and productivity of those individualized content by those key accounts on our platform or the big accounts on our platform and also help them to enhance the stickiness and customer relationships. And also second is that it could help us to really supplement and also regain some of those medium to long-tail accounts on Weibo. So you can see that for Weibo in terms of the content creation, we have a characteristic which is that the ecosystem for the top accounts or top ranking accounts is pretty much optimized and also — but still pretty much weaker for those medium to long-tail accounts.
So AIGC is going to be very much a supplementary in helping with those medium and long tail accounts in terms of the content generation. And also in Q2, we’ve been seeing a very good trend of some of those big accounts like hundreds of those important accounts of already trying the AIGC capability in helping them to actually cater the needs of their customers in writing some of the articles or creating some of the contents that will have the similar style that their customers want. But still, this is not fully rolled out to the rest of the community. So I think that in the second half of this year, we’re going to see more and more of those top accounts of using AIGC capability. And also, second thing is that we really believe that it is going to be very important for giving us a further supplementation of the vertical traffic and also vertical content, especially in terms of the travel and also the food, et cetera.
So because the top accounts, of course, are creating very good content in these 2 areas. But still, we are lack of the good quality content for those medium level accounts and also medium level users. So I think that the AIGC is going to be of great help and support in this particular area, so that the efficiency of operation of those medium-level accounts could be pretty much enhanced. And another 2 areas. First of all, in Q2, we have been seeing a more and more high efficient interactions created and generated because of AIGC. For those kind of quite professional and also specific topic-oriented accounts like for the relations and finance and zodiacs et cetera, et cetera, so because it does require a lot of very professional and also very much style-oriented answers.
So we are using AIGC to offer those very professional answers and also the capability of AI chat can also help these accounts of increasing their stickiness with their users and followers as well. And also thus generating certain revenue and income for those accounts. And second part is that some of the medium level leverages are actually using and utilizing the capability of AIGC in generating images through images and also the function of AI chat as well. So most of those medium-level celebrities are already using this capability to enhance their daily operation. So starting from September of this year, we are going to see more and more top level celebrities of trying and using this capability.
Operator: Dear speakers, there are no further questions and I would like now to hand the conference over to Sandra Zhang for any closing remarks.
Sandra Zhang : Thanks, operator. This concludes our conference call today. We will see you next quarter. Thank you.
Operator: Thank you very much for participating. You may now all disconnect.
