Chinese Adult E-commerce Giant TaQu, with 50 Million Users, Enters Hardware Market to 'Redefine the Masturbation Cup'

Within the context of traditional culture, “sex” has long been a private topic; even adults often react with apprehension at its mention. Yet, beyond the taboos, and accompanied by a certain shyness and awkwardness, sex serves as an expression of love. This dynamic has spurred the emergence of various adult novelty products. Beyond love and taboo, sex is also a business.

As healthy attitudes toward sexuality take shape and consumer awareness of sexual wellness products begins to emerge, the adult novelty industry has entered a period of rapid growth. The era of discreet adult stores tucked away on street corners is over; today, the appropriate ways to engage with this market include unmanned convenience stores, self-service vending machines, e-commerce platforms specializing in intimate products, online communities focused on sexual wellness, and social media channels dedicated to the sector.

From an industry perspective, relevant statistics show that in 2015, the transaction volume of adult novelty products in China was $18 billion. In contrast, the United States, with only one-quarter of China’s population, recorded a transaction volume of $65 billion during the same period. Japan, a neighboring country with less than one-tenth of China’s population, consumed $83 billion worth of adult novelty products. These figures indicate that China’s adult novelty product industry has substantial room for growth, both in terms of absolute market size and per capita consumption.

VCBeat (WeChat ID: vcbeat) conducted an exclusive interview with Huang Tiancai, founder and CEO of “Taqu,” a leading Chinese e-commerce platform for adult products, to discuss the industry.

“Taqu” founder Huang Tiancai (center) and co-founder

“Taqoo” boasts 50 million users, was listed on the New Third Board in May last year, and announced profitability in the first quarter of this year, becoming the first adult e-commerce platform in China to achieve profitability; the semi-annual report released by “Taqoo” last month showed that it continued to be profitable in the first half of the year.

“Taqu,” a consistently profitable company, has also become synonymous with the “new economy of adult pleasure.” Meanwhile, bolstered by its impressive financial data, Taqu has ventured into smart adult hardware, launching the “Jile Island” product series in collaboration with manufacturing partners, aiming to “redefine the masturbator.”

So, from the perspective of “Taqu,” what is the current ecosystem of China’s adult novelty industry, and how will it develop in the future?

In Huang Tiancai’s view, adult products serve two functions: one is to meet needs, and the other is to enhance existing experiences.

“College students, for instance, have inherent needs; if not properly guided, they may seek fulfillment elsewhere, which could lead to certain social issues. Meanwhile, the majority of people purchase adult products to enhance their sexual experiences. While it may begin as a novel experiment, we should encourage them to take that first step with confidence.”

The first thing “Taqu” did was to tell the public that sex is not a taboo subject, and that adult products do not need to be labeled as pornographic or vulgar.

"Taqu" Official Poster

Based on the current classification of e-commerce platforms for adult products, they can be categorized into three types: comprehensive, pharmaceutical, and vertical. Representative comprehensive platforms include Tmall and JD.com, both of which have launched dedicated sections for adult products. Pharmaceutical platforms are represented by Kangaiduo, 111.com.cn, and Jianke, where family planning and adult products account for a significant proportion of their transaction volume. Vertical platforms are represented by Taqu, Chunshuitang, and Taohuawu.

The development models of the first two categories are largely similar, focusing on meeting the needs of the majority of users and emphasizing traffic volume and hit products. Vertical adult product e-commerce platforms possess both utility-driven and transactional attributes.

“Taqu is a community + e-commerce development model.This approach is largely driven by consumer habits in the Chinese adult novelty market. First, while users may be interested in such products, they often lack clarity on what to purchase or how to make purchases, necessitating an initial phase of consumer education. Additionally, comprehensive e-commerce platforms tend to prioritize traffic and best-selling items, often paying insufficient attention to user experience; as a result, consumers may end up with products that do not truly meet their needs.

Huang Tiancai told VCBeat that the “Taqu” app features a community discussion section with a wealth of high-quality original content, produced through both PGC (Professionally Generated Content) and UGC (User-Generated Content). “We encourage users to upload their own product usage experiences and insights, as such authentic exchanges offer more practical guidance. For reviews of new products, we rely on our in-house content team, whose professional expertise enables them to provide detailed analyses of product features and effectively serve as shopping guides.”

It is precisely this authentic communication experience that has brought significant popularity to “Taqu.”The registered user base of the “Taqu” app has now surpassed 53 million, with a monthly addition of 30,000 new users. In terms of engagement, daily active users (DAU) stand at approximately 500,000, while monthly active users (MAU) exceed 10 million.

With popularity secured, the next consideration is how to monetize it. Huang Tiancai admitted that the current conversion rate for users of “Taqu” remains relatively low, amounting to only about 1%–2% of the total user base.

“We are now the largest community in China for the exchange of sexual health and wellness products, with a substantial user base. Our next step is to focus on enhancing user retention and improving conversion rates.”

Huang Tiancai believes that,“Taqu”’s most valuable resource at present is its users, while contemplating monetization strategies, we place significant emphasis on safeguarding user experience and will not compromise it for commercial gain. “We exercise considerable restraint in our commercial practices. If our goal were simply to boost user conversion rates, we could easily increase the number of advertisements within the app. We refrain from doing so because we are committed to protecting the user experience and creating greater value for our users.”

“Taqu” Mid-Year Report Shows H1 Revenue Near RMB 70 Million, Up 78.28% Year-on-Year; Net Profit Exceeds RMB 4 Million, Compared with a Loss of Over RMB 4 Million in the Same Period Last Year. The Shift from Loss to Profit Has Drawn Industry Attention and Is Seen as a Turning Point for the Adult E-commerce Sector.

However, Huang Tiancai holds a different view on this matter. He stated, “The fact that several adult e-commerce companies listed on the New Third Board—such as Taqu, Chunshuitang, and Taohuawu—have not yet turned a profit should not lead to doubts about the industry’s profitability. In fact,”The adult novelty industry remains quite profitable, with gross profit margins generally exceeding 40%.“, check out these listed companies; their reported gross profit margins are also above 30%.”

The primary reason for high gross margins yet net losses is that e-commerce platforms require substantial spending on market promotion and marketing. Taking Taqu as an example, its sales and marketing expenses in the first half of this year amounted to RMB 11.688 million, representing an 8.88% year-on-year decrease. This reduction in sales and marketing expenses has created room for profitability.

Huang Tiancai believes that as Hequ’s marketing and promotion model matures and its business system takes shape, cost control will become more refined, enabling sustained profitability.

From the perspective of the entire adult novelty e-commerce industry, Huang Tiancai believes that the outlook is not optimistic, and it is highly likely that bad money will drive out good.

His rationale is that,The entire industry now emphasizes traffic and viral hits, inevitably leading to price wars.“We have observed that the repurchase rate for adult products on some comprehensive platforms is actually very low, and user ratings are not high. A significant portion of these users are first-time buyers who have very high expectations for their initial purchase of adult products, but the items they receive often fall short, which severely undermines their overall experience.”

Furthermore, the development of new adult novelty products is rather indiscriminate across the industry. “Some pseudo-demands are forcibly incorporated solely to justify higher prices. Take male masturbators as an example: various gimmicks such as electric vibration, heating functions, and dual-ended designs are touted, yet the technological sophistication of these products is not high; they essentially consist of adding motors and other components to standard silicone bases. Even for products featuring remote control or app-based interactivity, the technical barrier remains relatively low, resulting in significant premium pricing for merely marginally better products.”

In Huang Tiancai's view,Adult novelty products have now polarized into two extremes: one is an excessive pursuit of profit through price wars, resulting in poor quality and user experience for mid- to low-end products; the other is that products with slight added value are priced excessively high, leading to a significant disconnect between price and value in the adult novelty market.

The industry has entered a phase of upgrading and enhancement. First, the product portfolio must be upgraded; second, the information asymmetry between manufacturers and users must be bridged. Intermediaries are needed to curate high-quality products and filter them for users, particularly early adopters. This is precisely what Hequ plans to undertake in its next stage of development.

“First, we need to empower users to speak openly about sex, fostering a culture that views sexuality as something positive through user education. Once this educational foundation is laid, the next step is to enhance their experience by curating products worth purchasing.” In Huang Tiancai’s view, China’s adult novelty industry should refocus on the users themselves, rather than adopting a “fast-moving consumer goods mindset” to exploit consumers at an early stage, which would undermine long-term sustainability.

Focusing on hardware to build a portfolio of brands is Hequ’s next operational priority. Huang Tiancai told VCBeat that Hequ acquired a stake in Xiamen Zhenwan Intelligent Technology Co., Ltd. in September 2016. Zhenwan Technology has applied Wi-Fi, 4G, Bluetooth, and other technologies to its adult products, and its designed and developed “Jile Island” product series has officially launched."Bliss Island" adopts an intelligent modular design, with each smart module being individually detachable, connectable, and combinable, allowing it to transform into a rotating telescopic masturbator and a rotating masturbator.The “Bliss Island” series features recordings by professional Chinese voice actors, combined with American 3Dio ASMR binaural recording technology, offering professionally customized, real-life immersive experiences.

“Jile Island” Series Product Images

In addition, the scenario-based usage modes “Intelligent Erotic Mini-Games” and “Health Services,” jointly launched by Hequ and Zhenwan Plan, both support software-hardware integration. Leveraging big data on sexual health and relationships, these initiatives facilitate product analysis and innovation, enabling the development of more human-centric and intelligent adult products.

Huang Tiancai devoted considerable attention in the interview to Taqu’s first “blockbuster product” as it dipped its toes into hardware; in his view, this product essentially embodies a microcosm of the “next-generation” offerings.

Based on the evaluation content, the "Jile Island" series of products meets the needs for privacy and intelligence in male masturbators. It not only truly frees the hands but also continuously learns about the user through machine learning to enhance the user experience.

“Beyond innovations in privacy, the Jile Island series also makes significant strides in intelligence. We have integrated somatosensory modules that collect data such as user-sensitive points, pressure, and speed, record optimal usage patterns, and allow users to download various motion profiles to experience different ‘instructors.’”

"Jile Island" Series Product Images

Furthermore, thanks to its modular assembly, hardware upgrades can be performed when new components become available, rather than adhering to the traditional model of one-time consumption.

Although high hopes were pinned on hardware iterations, Hequ has not been heavily involved in hardware production. Huang Tiancai told VCBeat,Taqoo’s primary engagement in the hardware sector remains centered on investment and partnerships; going forward, it will gradually replicate its collaboration model with Zhenwan to build a portfolio of well-regarded brands.

“China’s production capacity for adult novelty products is certainly commendable, with many capable manufacturers; however, we currently lack a cohort of well-reputed brands. Hequ will open up collaborations with suppliers and, through professional evaluations and screening, help foster the emergence of a number of brands.”

Additionally, Huang Tiancai also mentioned the issue of regulatory gaps in the adult novelty industry during the interview. Since the State Food and Drug Administration issued a notice in 2003,There is no dedicated regulatory body for adult novelty products; oversight of the entire industry remains relatively lax, relying entirely on self-regulation., it cannot be ruled out that Taqu will engage in the development of industry standards in the future.

In fact, this is also an urgent issue that needs to be addressed for the sustainable development of China’s adult novelty products industry, with many major manufacturers and platforms actively making efforts. For instance, Alibaba Health recently released the “Technical Specifications for the Quality of Adult Products,” including the Technical Specifications for Adult Novelty Toy Products and the Technical Specifications for Personal Lubricants. These standards were jointly developed by Alibaba Health, Vicky Certification & Testing Co., Ltd., and the Shenzhen Academy of Metrology and Quality Inspection, among others.

Huang Tiancai predicts that the future development trend of China's adult novelty industry will continue to improve, with a continuous increase in the consumer base and average transaction value, indicating significant growth potential for the market size.

As a direct interface with consumers, the “Hequ Community + E-commerce” model has secured a substantial user base and exerts a certain influence on consumer behavior, potentially emerging as the optimal development path for the adult product e-commerce sector.