Zhihu Inc (ZH) 2021 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Zhihu Inc. Fourth Quarter and Full Year 2021 Financial Results Conference Call.

At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Jingjing Du, Head of Investor Relations. Please go ahead, ma'am.

Thank you, operator. Hello, everyone. Welcome to our fourth quarter and full year 2021 financial results conference call. Joining us today are Mr. Zhou Yuan, Chairman and CEO of Zhihu; Mr. Sun Wei, our CFO; and Mr. Neo Zhang, Head of Community Business Division and Strategic Development. Before we start, we would like to remind you that today's discussion may contain forward-looking statements, which involve a number of risks and uncertainties. Actual results and outcomes may differ materially from those mentioned in today's announcements and the discussions.

The company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our website at ir.zhihu.com. I will now turn the call over to Mr. Sun Wei, our CFO.

Okay. Thank you, Jingjing. I am pleased to deliver today's opening remarks on behalf of Mr. Zhou Yuan, Founder and CEO of Zhihu. Thank you for joining the Zhihu 2021 Fourth Quarter and Full Year Earnings Call. 2021 was a remarkable year for Zhihu. In March, we successfully completed our IPO amidist a challenging market environment and went on to complete the year with sustained robust financial growth. Throughout the year, as part of our continued effort to enhance content quality, we focused on promoting and distributing fulfilling content, or content that we believe broadens presence, provides solutions and resonates with mind.

Our videolization strategy proved to be effective and broadened diversity of Zhihu's content library to a new level. This enables content creators to contribute with even greater levels of creativity and strengthen our capabilities to meet the growing content consumption needs of our users. We continue to benefit from our commitment to deliver fulfilling content and enhance our operating efficiency, realizing another year of strong user-based growth and a more appealing content ecosystem for business partners.

In Q4, our user base reached a new high in the fourth quarter with average MAU exceeding 100 million and a year-over-year increase of 36.4%. Our content-centric monetization approach maintained its robust growth momentum with revenue in Q4 increasing by 96.1% year-over-year to RMB 1.02 billion and the revenue for the full year, increasing by 118.9% to RMB 2.96 billion. And the contribution of non-advertising business increased to 62.9% in Q4.

At the same time, our average monthly paying members for Q4 further increased by 102% year-over-year to 6.1 million and accounted for 5.9% of total MAUs. We believe these achievements are the result of not only the successful implementation of our content-centric growth strategy, but also the joint efforts of all the parties in the Zhihu community.

Throughout the year, we relentlessly strived to enhance the quality of the Zhihu content through better understanding of our content creators and deeper comprehension of the Zhihu content. And we focused on promoting and distributing fulfilling content or the content that we believe broadens presence, provides solutions and resonates with minds. This high standard has not only been the benchmark for our diverse content library, but also the cornerstone of the long-term development of the Zhihu community.

As of the end of Q4, the cumulative pieces of content on our platform has reached 490 million, representing a year-over-year increase of 39%, of which the number of questions and answers increased to 420 million, representing a year-over-year increase of 33.8%. As of the end of Q4, the average daily production of fulfilling content has increased fourfold compared to when we first launched the algorithm to promote fulfilling content.

In 2021, we also adopted a scenario-oriented content operating efficiency -- sorry, operating strategy to further diversify our content offering. With this in mind, we deepened and refined our operations based on the differentiated consumption demand of various communities across the important calendar events throughout the year. These included seeking answers from science, China's Youth Day and the college entrance examination in the first half of the year.

And followed by the Tokyo Olympics, the autumn employment season, 100,000 Whys, the Nobel prize, a 2021 Zhihu Top 100 List and the year-end reviewing in the second half of the year. As a result, in Q4, the consumption percentage of fulfilling content in our cornerstone field and other categories, including education, increased by 3% compared to the same period last year. This demonstrates that Zhihu's fulfilling content is resonating with students and young people in a way that meets their evolving demand for self-development and lifestyle content.

According to our recent user survey, over 90% of the monthly active users on Zhihu platform have a strong appreciation for fulfilling content. The enhanced recognition and content consumption, coupled with the simulated creating activities, sustainably drive the rapid growth of our content-centric ecosystem. We seek to become a popular destination for timely content, inviting in-depth discussion of training events, which further encourages a high level of content creation and user engagement. It is also an important category that is well suited to address the demands of users aged about 30 and help successfully drive our organic user growth.

As of the end of December, the number of users for timely content consumption remained about 40% of total DAU. Browsing trending events on Zhihu has gradually become second nature for our users. In the fourth quarter, multidimensional and insightful discussions covering major international affairs, social news and topics related to people's livelihoods were generated quickly on Zhihu, creating timely content for users. These questions generated tens of thousands of answers in more than 100 million page views along with millions of user interaction.

During the Winter Olympics, Zhihu users have defended our title of the master of skills and tactics in Chinese (foreign language), which gained from the Tokyo Olympics. And we continue to provide professional, timely and broad-based fulfilling content across various formats. Questions like what are the highlights of the 2022 Beijing Winter Olympics Opening Ceremony, and which shows impressive you most motivated the answer directly from the opening ceremony operation team, including Director Zhang,Yimou himself, and received close to 40 million page views and 100,000 uploads within a few hours from users.

In 2022, we will continue to iterate our timely content recommendation algorithm and related products to better meet the diverse consumption needs of our users. During 2021, we further integrated the video content into our vibrant ecosystem through expanding the library of videolized answers, providing tools to facilitate text to video or joint integration. In the fourth quarter, the average number of monthly uploaded videos on Zhihu and the number of video creators increased by 211% and 32% respectively compared to the same period last year. Meanwhile, the number of DAUs who consume video continued to increase and exceeded 45% in Q4.

In Q4, we held Zhihu's first highly voted joint creation competition. Within less than 4 weeks, more than 4,000 content creators participated in the competition. From using the authorized 2 million pieces of high-quality graphic and text content in our library, more than 2,000 original video submissions were produced and received. This work cover dozens of diverse topics, including science, history, career, psychology and extremely imaginative ideas, and received over 200 million views. We firmly believe that the healthy content ecosystem, it is a one that revolves around creators and fully support creator engagement across multiple formats.

Moving forward, we will continue to upgrade our product and the business strategy and optimize our organization structure as needed to further encourage creation activities. Along with our initiatives to further broaden the coverage of fulfilling content on the Zhihu platform, we have upheld community culture through proactive upgrading of the community governance system. In Q4, we strengthened our ability to identify noncompliant content and accounts involving cyberbullying, rumormongering, incitement and violence against children. We dealt with more than 4.6 million pieces of noncompliant content and suspended more than 15,000 accounts. Moving forward, we will continue to uphold our social responsibility, ensuring that the community culture of sincerity, expertise and the respect is maintained for our long-term growth.

Our user base continued its rapid growth rate, driven by our healthy and more diverse content-centric ecosystem. In Q4, the average monthly MAUs on the Zhihu platform reached 103.3 million, representing a year-over-year increase of 36.4%. Our average monthly paying members reached 6.1 million, representing a year-over-year increase of 102%. And our average monthly viewers increased by 7.4% year-over-year. We have amassed a fast-growing, diverse and highly engaged user base. Currently, the vast majority of users are under the age of 30, while users from second and lower-tier cities accounted for 52% of our user base, the female users accounted for 47% of it. It is worth mentioning that the organic growth of new users continue to maintain a significant proportion in Q4.

Also, our efforts in refining operational efficiency further accelerated the consumption in the related verticals, including Baby Care and the lifestyle and also boosted the growth of our core users, aged in the 30 years old and above. It is encouraging to see that the DAU to MAU ratio in the fourth quarter remained steady, along with the rapid user growth and the average monthly engagement increase on a year-over-year basis.

Creators are one of the most important participants in our community. They not only flourish the community with high-quality content by sharing their knowledge, experience and insights, but also gain inspiration, respect and recognition from the community by interacting with other users. Thus, in 2021, we supported creators by improving their experience within the community, launching a series of tools and functions and upgrading incentive plans for them. For example, we made several upgrades to the follow functions, including an independent tab in order to support creators to better attract and interact with followers. As a result, we see a significant rise of average new followers per creator.

The one-click ppt generation and the joint creation functions enable creators to utilize a more convenient video creation experience. In addition, our refined operation tailored for different levels of creators effectively encouraged their engagements in multi-genre creation. Thanks to these initiatives, we saw a steady increase in both the average daily activities of the high-level content creators and their high-quality production in Q4. We also saw arising inspiration and encouraged interactions among creators within the community.

In 2021, we took great efforts to strengthen our ability to attract new content creators in the Re-discovery Sincerity campaign held in Q4, more than 100 annual Zhihu content creators in Chinese (foreign language) were selected from various fields, including science, lifestyle, social sciences, humanities, fashion and psychology. Moving to 2022, we will continue to provide effective and professional support to the creators based on their own needs and specialties. At the same time, we will further encourage the production from new creators and continue to improve their retention rate.

By fostering both existing and new creators, we are confident and excited to inject even more vitality into our community ecosystem and provide multi-scenario content-centric solutions to our brand partners. In spite of many uncertainties in the macro economy during 2021, we have focused on building a high-quality content-centric ecosystem as the foundation for our healthy and long-term business development.

Our total revenue for 2021 reached RMB 2.96 billion, representing a year-over-year increase of 118.9%, while our underlying revenue structure was further improved and optimized. As a percentage of revenue, non-advertising revenue further grew to 60.8% in 2021 from 37.6% in 2020, of which content-commerce solutions revenue for the year increased to 32.9% from 10% in 2020.

Our paid membership business remained stable and accounted for 22.6% of our total revenue in 2021 and other revenue, which primarily contributed by e-commerce and vocational training related business increased by 196.3% year-over-year to RMB 155.9 million. In 2021, we have further improved our commercial content ecosystem through the following steps. The first step was to solidify the infrastructure of the commercial content by launching our Cheese Platform and connecting content creators with business partners, we helped creators to improve their own monetization capabilities, while satisfying the marketing demand of business customers all the way from brand building to actual transaction conversion.

Other tools like Toast and Youshu were launched to further improve the efficiency of commercial content creation, so as to further encourage content production. As of the end of December 2021, a total number of content creators who generated financial income through our content-commerce solutions exceeded 15,000.

Secondly, we helped build the content pool for brands and merchants. Through a series of brand content marketing campaigns, such as Auto Lab, Curiosity Lab and Zhihu Top 100 List, we assisted our business partners in guiding their customers along the journey from brand name awareness to decision-making. And finally, gaining user trust and sustaining business growth.

In 2021, our advertising revenues achieved a yearly growth rate of 37.7%. Furthermore, we continue to explore various potential vertical content ecosystem to elevate Zhihu's overall commercialization capabilities. Vocational training is one of them. It's related content on Zhihu platform is perfectly matched to the demand from core users aged from 18 to 36 years old. We call it the second 18 years of life, indicating a huge potential commercialization opportunities.

Moving forward, we will continue to improve our technical capabilities to develop more user-favored paid educational courses and the related content by leveraging the advantage of our Zhihu brand.

On top of rapid revenue growth, we also continue to improve our operational efficiency by adopting a smart and rational spending strategy and a continuous technology improvement plan. We can achieve both quality and effective customer acquisition and further develop our commercial ecosystem by leveraging our abundant user base and a solid technical infrastructure. Our acquisition cost per additional MAU for full year 2021 was approximately RMB 60, which remains relatively low compared to the whole industry. In 2022, we will continue to recruit excellent R&D talent as we work to improve our recommendation algorithm, strengthen the construction of our data systems and solidify the technical foundation that drives the ongoing development of our community.

Meanwhile, we will further enhance Zhihu's brand name awareness by creating powerful IPs such as an adventurous evening with answers in Chinese (foreign language), and annual Zhihu content creators ceremony, to achieve our growth across brand building and high-quality user growth. As of December 2021, cash and cash equivalents, term deposits and short-term investments were RMB 7.4 billion, which gives us strong financial resilience to power our future development.

Stepping to 2022. Through prioritizing the healthy development of our community and the gearing to our fulfilling content standard, we will be able to further improve the experience for users and creators and inject our whole community with both trustworthiness and a sense of belonging. For example, following the improvement of products and functions across training topics, top searches, live streaming and video, users were able to enjoy a better consumption experience for timely content.

Here is another case for content related to the Winter Olympics and the ongoing Russian-Ukrainian war, where high-quality discussions were aggregated across various formats, including graphic and text, live streaming and video, allowing users to consume content according to their own preferences. We committed to further upgrading our recommendation algorithm to ensure that fulfilling content can be introduced to users more accurately.

On our creator community side, we will enhance our initiatives to refine operational efficiency to help creators achieve their goals, both in user recognition and financial income. We believe a healthy and vibrant community will lead to more efficient and organic user base growth. In addition to the above, we will continue to explore more commercialization opportunities within vast verticals in our content library and among our users' diverse and various demands.

Our emerging vocational training business is a good example, which can help us to both further diversify our business ecosystem and contributed to drive our long-term growth. 2022 may prove not to be an easy year. However, we believe that we are all well prepared and better positioned for the journey. As we continue to unlock the value of our unique content-centric ecosystem and benefit from growing scale, we will continue to enhance our operating efficiency and financial health as well as fulfill our responsibilities to the society.

This about concludes the remarks of Mr. Zhou Yuan. I will now talk you through our Q4 financial performance in a little more detail. As discussed, we achieved another solid quarter of performance in Q4 2021, despite the unpredictable headwinds. In the fourth quarter, we recorded our total revenue of RMB 1.02 billion, representing a 96.1% year-over-year increase.

This increase benefited from our very unique content-centric business model. Our fulfilling content library was further expanded and diversified in Q4. This contributed to the continuous prosperity of our community and also to the sustained growth of our user base. Our average MAUs reached 103.3 million in the quarter, representing a year-over-year increase of 36.4%. Worthy of note, in Q4 2021, our non-advertising business, which mainly includes our content-commerce solutions and paid membership, enjoyed accelerated growth, contributing 62.9% to the total revenue in Q4 compared to the 38.6% in the same period last year. This demonstrated not only the remarkable success of our content-centric monetization model, but also the scalability of our content-commerce solutions as well as the robust growth in demand for our other services such as paid membership and vocational training.

In Q4, the revenue contribution of our content-commerce solutions increased to RMB 367.3 million, representing a year-over-year increase of 380.2%. Our client base of CCS became more diversified compared to the same period in 2020. We are also excited to see that more and more content creators are empowered by our diversified commercial platform and the tools such as Cheese Platform. As of the end of Q4, the number of content creators who have joined our Cheese Platform, nearly increased 50% compared to the number in Q3.

Our paid membership contributed RMB 208.8 million to total revenue in the quarter, representing an increase of 100% compared to the same period last year. At the end of Q4, our average monthly paying members reached 6.1 million, with a paying ratio of 5.9%. The robust growth rate of this business line was solidly underpinned by the increasing vitality within our creator community.

Meanwhile, our advertising business achieved solid growth Q4 despite of the weaker market. In this quarter, advertising revenue recorded RMB 377.8 million, representing an 18.4% year-over-year increase, of which the display-based advertising grabbed a greater percentage.

Revenue from e-commerce, Internet services, FMCG, consumer electronics and vocational training were the top 5 contributors bolstered by our diversified content library and highly engaged community. Our advertisers find it is natural and effective to guide their targeted customers during the whole decision-making process and to build brand trust in the long term. Other revenue mainly comprising of our vocational training and e-commerce achieved year-over-year growth of 230.5% in Q4, increasing to RMB 65.4 million. It is worth mentioning that our vocational training business had a very strong quarter and achieved multiple times year-over-year growth.

Stepping to 2022, by leveraging Zhihu's deep understanding of users' needs and our brand name recognition, combined with further increased operational efficiency, we believe these new business lines will be able to continue to achieve strong growth momentum.

As the UGC based content platform, we enjoy the benefit of having a healthy gross margin of 47.1% in the fourth quarter and 52.5% for the full year. Meanwhile, we have been investing in building a healthy content ecosystem in order to broaden and enhance content offerings for all of our users. However, we will be very conscious of maintaining high efficiency on our cost structure.

Our total operating expenses of RMB 855.1 million declined as a percentage of total revenue on both a year-over-year basis and a quarter-over-quarter basis. Our operating expenses in the quarter were primarily composed of sales and marketing expenses and the investment in human resources. Driven by the abundant content coverage and the diverse content format of the Zhihu platform, the organic growth of new users continued in Q4 and effectively promoted healthy and long-term development of the Zhihu community as a whole.

As a result of all the above, our non-GAAP adjusted net loss, which primarily excludes share-based compensation expenses, was RMB 240.8 million in the fourth quarter of 2021, while focusing on improving our cash flow management as of December 2021, the company had cash and cash equivalents, term deposits and short-term investments of RMB 7.4 billion compared with RMB 3.1 billion on December 31, 2020.

So I will conclude with our overall financial outlook. Looking to the first quarter of 2022, the company expects total revenue to be in the range of RMB 720 million to RMB 740 million. Please do note, however, that the above outlook reflects Zhihu's current and the preliminary estimates and may be subject to change. Okay, this concludes our prepared remarks.

(Operator Instructions)

The first question comes from Yanyan Xiao with CICC. Please go ahead.

(foreign language)

Thanks, management. And I have 2 questions. And the first one is about how does the management think of the strategic direction of the company in 2022? And the second question is regarding the content ecosystem, especially for the content creator side and for the commercialization. So what are the potential enforcements in the 2022?

(foreign language)

Thank you very much. This is the answer from CEO, Mr. Zhou Yuan. [Interpreted] First of all, in the year of 2021, we have made some concrete achievement at the current stage. In terms of a sense of fulfillment as well as medium upgrades. And based on this foundation, we will put our strategic focus for the year of 2022 to ecology first.

(foreign language)

[Interpreted] What do I mean by ecology first. Well, first of all, it means that there are things that we have to accomplish on top of the user number increase and also revenue number increase. What is more important and higher up on the top of our hierarchy are the experiences of content creators, the word of mouth of consumers as well as the satisfaction level of the community atmosphere. All of these factors that I mentioned will be attest to whether or not we have done a good job. And of course, the numeric or KPIs are also very important, and we'll try to also hit those targets and also reduce the loss for the year.

(foreign language)

[Interpreted] Second, in terms of the product and operations that we have, we'll try to unleash the full volatility of the community that we built. In this perspective, as I said before, a good ecosystem focuses on a couple of things. First is multi-forms of medium and multi-forms of monetization. And the third is end to end. And I'll elaborate a little bit more in detail.

(foreign language)

[Interpreted] By multiple format of mediums I meant that by using different mediums, we'll be able to cater for different needs of our users in different scenarios. It's just like having a dinner, you have a first appetizer and then the main course and then followed with some dessert at the end.

(foreign language)

[Interpreted] By multiple ways of monetization, I mean, today, the creator population, they're a diversified group of population. And we, as a platform, we have to be adaptive to cater for their needs and experiences rather than having the creators coming to us and adapting to our platform.

(foreign language)

[Interpreted] And last but not least, by end to end, I mean, we have multiple types of creators at different levels, and we would want to make sure that our platform is running efficiently and quickly so as to create a closed loop for those creators to be able to finish the content creations and make money. So according to these 3 key factors that I just mentioned, we do have a lot of rooms for further upgrades.

(foreign language)

[Interpreted] If you know Zhihu well, you may notice already that we have made quite a lot of changes to our product last year. And through this process, we have also got quite a lot of learnings. And this year, our plan is to further reduce the level of difficultness for the content creators and also to increase the consumer experiences to have further iterations of our product. And also, at the same time, we'll try to continue to allocate more resources to those who continuously creating contents that are bringing higher sense of fulfillment.

(foreign language)

[Interpreted] The third point I want to make is that everybody knows that only by having healthy content, healthy commercial products, we're able to have continuous revenue and create useful values. And as you can see that we have an impressive performance on CCS. And around CCS this year, there are many, many more changes to production to come in the year of 2022.

(foreign language)

[Interpreted] The last point I want to make is that we had already worked out our business in vocational training this year due to the belief that we think it's a good supplementary to our ecosystem. And we just discovered that the demand for taking exams and having vocational training is really huge, and the size is quite impressive. And therefore, we will have some more progress to be made in vocational training by working with our education partners this year.

(foreign language)

[Interpreted] So as I said before, ecology first is our overall strategy, and we believe that by implementing this strategy well, we will have improved the numbers for years to come. And I will direct the second question to our Neo Zhang.

(foreign language)

[Interpreted] So this is Neo Zhang, the Chief Strategy Officer responsible for the community. So for the content creators and sense of fulfilling, we will focus on the content creators, especially the original content creators by giving them a better creation tools through our product and our technology and to support them to have multi medium formats of expression so as to help them work better.

(foreign language)

[Interpreted] Second is about the traffic and benefit innovation schemes, especially for those who are with us for the longer time in the cornerstone areas, we would have some new schemes in terms of benefits in order to supplement with the Cheese system and YanPlus system that we already have, so as to benefit those creators with better traffic and better monetization.

(foreign language)

[Interpreted] As to the standard of sense of fulfillment, we had already completed preliminary algorithm for that, and we have deeper understanding as to the content and capacity of our content creators so that we'll be able to have a higher efficiency and better control of cost in terms of the supply of content all the way up to the distribution of the content. And for those content creators from different areas and at different levels, we'll be able to create sort of better areas of communication through our algorithm improved so that we'll have both squares and also clubs.

(foreign language)

[Interpreted] By way of summary, just as our CEO, Zhou Yuan, said, we'll continue to have ecology first and continue to help our content creators to support them further content creations and to give them some very nice monetization mechanism.

The next question comes from Natalie Wu with Haitong International.

(foreign language)

My question is related about the online advertising, industry updated (inaudible) advertising from your perspective. So just wondering what's the latest trend and outlook for the online advertising industry in China and for more specifically for traditional brand ad, performance based ads and CCS, et cetera.

Also for the specific industry in terms of the advertisers, just wondering, any particularly stronger or weaker on a year-year basis from your perspective of it? And how is your exposure for that? And also in terms of the full year of 2022, how should we think about your year-on-year growth for the advertising business also the CCS?

(foreign language)

[Interpreted] Thank you very much, Natalie, for your question. We actually have made 2 observations in terms of online advertisement recently. First is because of the uncertainties around the macro economy, the politics as well as the regulation, the general environment indeed has made some negative impact on our clients' marketing budget. In the past couple of quarters, you see that the total size of the marketing budget probably dropped quite a lot.

And the second is that we noticed that there is a major structural change to the marketing budget of our clients. More and more marketing budget is switching from traditional media platform towards content platforms that has better and higher qualities of content, including content community like us.

Therefore, our clients, they focus more and more on making long-term investments in building their brands and also to make accumulations of high-quality content assets, and during this switching or shift of structural budget shifts, content community, high-quality content community like Zhihu, we are actually benefiting from this trend.

(foreign language)

[Interpreted] So against this backdrop, we see that CCS plus advertisement as a model for us, it's giving us very nice growth. For instance, our year-on-year growth for the whole year '21 increased by 180% and fourth quarter year-on-year increase was 88%.

(foreign language)

[Interpreted] Structure-wise, we see advertisement is still the #1 source of revenue we had. In Q4 we had a faster growth rate than the industry average. And for the whole year, we reached around 40% in advertisement increase.

(foreign language)

[Interpreted] In terms of the brand advertisement, we see that it's growing even faster at about 50% for the whole year. And as a percentage to total online advertisement revenue, it is also growing and getting a bigger part. In terms of verticals, we see e-commerce, FMCG, 3C, electronics and automobiles are growing very significantly, which is very unique and characteristic to Zhihu because we believe that these areas, they are closer to the consuming scenarios of the users and also closer to people's consuming decision point.

(foreign language)

[Interpreted] CCS is still the biggest driver for growth in Q4, increased by 4 times, and for the whole year about 6 times. About CCS is highly scalable and it is highly growth oriented. I believe that this has been proven too.

(foreign language)

[Interpreted] In terms of the content creators, by using the Cheese Platform, they entered into our ecosystem for CCS and be able to scale up more significantly meaningfully so that they can have a better income. By the end of the fourth quarter, the total number on Cheese Platform is 15,000 creators.

(foreign language)

[Interpreted] We are benefiting with better and better word-of-mouth in terms of CCS. We are seeing both the number of brands and merchants working with us on the rise. Vertically, we see e-commerce and personal care are the 2 biggest verticals, whereas Internet service and vocational training are showcasing very nice driving force.

(foreign language)

[Interpreted] So overall speaking for both advertisement and CCS, we have e-commerce, 3C, vocational and gaming, all of these categories put together accounting for 80% plus of the total advertisement revenue. And then the e-commerce, Internet service, automobile and 3Cs quarter-on-quarter, they registered a growth rate ranging between 20% to 60%. So that's very impressive.

(foreign language)

[Interpreted] For the year 2022, Q1, we saw that the growth will be over 50% year-on-year. And for the whole year, we expect it to be 60% to 65%, which will be higher than the industry average.

(foreign language)

[Interpreted] For the whole year outlook, we're talking about 60% to 65% growth, which will be higher than the industry average. And in terms of contributor size, CCS will be probably the biggest contributor by taking up about 1/3 of the total, following up with advertisement and paid membership also on the rise.

The next question comes from Steve Qiu with Goldman Sachs.

(foreign language)

Okay. I'll briefly translate myself. So I have one question on behalf of future plan regarding our vocational education. So understand that this business is still at the nascent stage, but could management share with us some high-level thoughts in terms of how actually manufacture or create high-quality educational content on a sustainable basis? So except for the content that already on our platform, how will we actually cooperate with our industry partners? Is that going to be done through M&A? Or is it going to be created by our partners and then we will be the publisher of this education content? And last but not least, could you please share with us some of the data points, such as the growth profile, the revenue mix as well as the market trend?

(foreign language)

[Interpreted] Answer from CEO, Zhou Yuan. Well, actually, for the vocational training business. In our mind, we believe that this is a real demand generated genuinely within the community as we see it over the years. And we see that there is a mid- to long-tail education system that is gradually taking shape in our community from the demand generated from our users. By way of example, in our Masters examination part. We see an active DAU of about 1 million or even higher than 1 million. So the demand is real and huge.

(foreign language)

[Interpreted] As I said before, the content system that we see in our system, we think that the people who are very active if we want to pursue like a professional certificate and use it as a forum to talk to like-minded people. And they also talk about their hobbies, their skills and how they can achieve a certificate or improve their skills in our communities. So we could provide greater support those people based on our content.

(foreign language)

[Interpreted] We believe that community that we have built already is a very good platform in order to generate an ecosystem specifically for education. Community can serve as an entrance for people to take up the content with regard to education that they required.

(foreign language)

[Interpreted] From CFO, Mr. Sun Wei. In terms of numbers, education vocational training in 2021, the size increased by 5x year-on-year. And in terms of percentage, it's still rather small at the beginning. So we put under the category of other income. However, in the year of [2022] (corrected by company after the call) in Q1, we saw that increasing to more than 5% and for the longer term, we believe that they have a potential of taking up about 20% of our total revenue.

(foreign language)

[Interpreted] In terms of types of product or categories of products that we have developed for training. In terms of exam, we have Master entry examination. We have civil servant examination in China. We also cover different type of professional skills, such as CSA or CPA or FRM. We also have business English training or writing skills training.

(foreign language)

[Interpreted] In terms of the infrastructure building, we had already completed the mid-office required for Zhihu education, for instance, we have this CRM education system that will be able to cover the whole value points from content creation and distribution of content. So in the future, either we can run it ourselves, operate it ourselves or we can acquire a partner and very quickly and efficiently incorporate the business into our own system as an infrastructure.

(foreign language)

[Interpreted] And also specifically to Steven's question. before all the course that we have for the time being are 1P instead of 3P, but maybe there will be 3Ps in the future.

Thank you. That concludes today's question-and-answer session. At this time, I will turn the conference back to Jingjing Du for any closing or additional remarks.

Thank you, operator. Thank you all again for joining us today. And if you have any further questions, please contact our IR team directly or TPG Investor Relations. Thank you.

Thank you. The conference has ended. You may disconnect your line.