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Article16 Apr 2021

The Perks of Online Dating

With a growing and digitally literate audience of single people globally, the move to online dating should not come as a surprise. We explore the topic of online dating by summarising the key themes from a recent report by Citi’s US small/mid-cap internet analyst Nick Jones. Nick discusses who uses online dating apps and why as well as what dictates potential success, noting that competition is fierce even though the market is not yet saturated.

The trends that appear particularly significant when evaluating online dating include the decreasing stigma of online dating, in conjunction with people getting married later in life (see Figure 1).  Add an increase in discretionary spending and ever-growing integration of digital product into all areas of life, and the interest in online dating is unsurprising. Over the last eight years, membership in online dating services has increased by about 20% among single Americans (Pew Research, Figure 2) and is likely to continue to grow. Nicholas highlights that dating app usage among older demographics is increasing, and given the trend toward later marriages, the two combined should extend the audience participation expectancy. Moreover, if members of the younger generation happen to find themselves single, they are more inclined to incorporate online services in their dating lives given their general comfort with digital services and technologies broadly; as seen in Figure 3, most users are between the ages of 18 and 29.

With an estimated 383 million single people globally (approximately 45 million in the US) having access to the internet and being willing to utilise online dating platforms, the addressable market is considerable. Nick notes that part of what dictates the potential success of various dating apps is their ratio of men to women (assuming that gender matching is heterosexual), as a higher ratio has been shown to lead to better matches, and therefore, the overall popularity of the app is likely to increase.

Although there is clear competition in the online dating space, with users likely to be taking advantage of multiple apps simultaneously, Nick notes that the market is not yet saturated. He highlights that a majority of single people are yet to engage in the online dating apps that are available, demonstrating that there is still space for trends to continue. He also notes that given more people and singles outside of the US, international scope is key.

Figure 1. The median age for marriage has steadily been increasing

Source: Citi Research, Pew Research

 

Figure 2. Adoption of dating sites/apps continues to increase

Source: Citi Research. Pew Research Center

 

Figure 3. Adults between 18 and 29 account for the highest percent of usage

Source: Citi Research, Pew Research

 

For more information on this subject, please see Bumble Inc (BMBL.O).

Citi Global Insights (CGI) is Citi’s premier non-independent thought leadership curation. It is not investment research. The comments expressed herein are summaries and/or views on selected thematic content from a Citi Research report. For the full CGI disclosure, click here.

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