QR code-based Price Comparison App Wochacha Now Has 140 million Users in China

QR code-based Price Comparison App Wochacha Now Has 140 million Users

By Tracey Xiang on August 16, 2013

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During 2013 Spring Festival earlier this year, many Chinese people who traveled back home from first-tier cities found their parents and friends in second- or – lower -tier cities were using Wochacha. Starting as a price comparison app, now it enables users to buy some goods directly. If you order goods from Wochacah’s partner supermarkets, deliverymen will send goods to your door. Brands or merchants can set up a channel on Wochacha selling goods or engage users. The QR code scanner now becomes more useful too that can track your parcels or download digital content. In addition it provides users with deals or coupons, price indexes, quality reports, etc.At 2013 China Internet Conference this week, Chen Hongzhou, its COO, disclosed that Wochacha users had reached 140 million in about 340 cities, with 5 million being daily active.

A couple of years ago, there was a wave of startups working on QR code for location checking-in, helping merchants build loyalty programs, or lottery draw. None of them grew to become a big company.

Tencent CEO Pony Ma started touting that QR code was the best tool to connect Internet users and offline world last year. The QR code scanner in the latest version of WeChat released this month grows increasingly powerful that now returns information of goods, street view, English-to-Chinese translations, among others.

Other big Internet companies are also working on services or features leveraging QR code. Alipay, the payments service under Alibaba, released QR code payments solution in 2012.

Wochacha thinks its core competence is price data. Chen says they are not afraid of the giants for Wochacha took so much effort collecting price data and is improving data sets. As we introduced before, the company once hired three hundred people visiting super markets one by one to collect prices.

Its revenue streams include CPS-based commissions from e-commerce sites or supermarkets, and display ads in apps. Wochacha raised $10mn in series A from Sequoia China.

 

Street-sweeping Data Raise the Bar for O2O Business

By Tracey Xiang on December 20, 2012

When Wochacha, a QR code-based offline price comparison app, hired over one hundred people to collect price data at every supermarket in first-tier cities — which is called “sweeping streets”, the board of its parent company opposed thinking it was a waste of money.

Back then Wochacha wasn’t an independent company, but an application developed by Galaxycore, a company in CMOS image sensor business, in order to make its hardware more competitive. The latter CEO of Wochacha, Zhao Lixin, managed to have the division for developing applications spun off from its parent company and established a new company in January 2010.

Now the team of its supermarket price investigators has more than three hundred members. “Not a single tool app would do such a stupid thing like what we did. And it’s late even if anyone would like to do that now. Offline price data is Wochacha’s core competence that took a long time to accumulate, like the rating and review data Dianping has accumulated by sweeping streets in a long time”, Zhao Lixin was proud of the data. (source in Chinese)

Dianping is a typical case that quality data raised the bar. It is considered one of the reasons that Dianping wasn’t copied and killed by internet giants, for manual labor isn’t what big players want to do business with. QR code-based apps are not difficult to develop at all. When Tencent started touting QR code, saying it’s the very medium to connect the online information world and your offline life, average apps are trampled to death is just a matter of time. But accurate data take time and labor to collect as Wochacha CEO put it.

In China where labor costs are comparatively low, Dianping and Wochacha are not alone. I got to know a company who was working on an automobile app, offering location-based information of gas stations, parking lots, repair shops, insurance services, etc. After finding that data bought from a geo data provider were not accurate — one of the reasons is there are always changes on the streets, the company built a 20-plus staff team to sweep streets. In a coffee shop in Beijing, street sweepers would walk in to ask for detailed information about this store for building all kinds of internet services, food delivery, online booking and the like.

After rolling out the price comparison feature, Wochacha added promotional information of brick-and-mortar stores’ near to a user at any location, which also asks for accurate data. When having acquired five hundred thousand users at the end of 2010, it regained support from the board of its parent company. Now it claims it has over 50mn users.

The company is receiving CPS-based commissions from directing users to e-commerce sites, such as 360Buy and Amazon China, and pocket money from banner ads in apps. In the future, it hopes to get revenue cuts from offline businesses by sending users to their stores with the location-based information. Having received a $10mn series A funding from Sequoia China, the company expects to break even in two years.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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