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Dianping CEO on Group Buying and Mobile Strategy

Chinese group buying site Meituan claimed RMB 50 million in sales last month. While DianpingTuan ranked only next to Meituan in transactions, according to Tuan800, the market researcher of China’s group buying sector. Dianping, the social rating site for life services, saw momentum growth for its daily deal service, yet the company views and thinks the market from different perspectives. An One-Stop Service Platform but GroupBuy-only Site

Zhang Tao, founder and CEO of Dianping, believes that “for local life services, updated information, best discounts and quality services are closely interwound.” Group buying can’t and shouldn’t be run as an independent business that separated from these three. And it’s risky to do so. His theory goes that merchants and users share three basic needs: To find the information; to provide coupon and discounts; and to offer flexible and satisfying service. Zhang sees group buying as just one way of giving coupons to users. There are coupons, discounts, rebating or loyalty program as well, but none of them is as attractive as group buying in his opinion. “The core value of this service is all about marketing. On consumer side, they might buy something from a promotion sale even if they are not familiar with the merchant. And on merchants side, group buying is the best campaign for them”. Obviously, Dianping is more into the idea of being an one-stop service platform. To meet the needs of both sides at the same time can ensure user experience as well as the healthy intercommunication between consumers and merchants. As to the business model, Dianping can get commissions from the group-buying service, and ads revenues from merchants as well. Dianping On Mobile

“Now that smart phones are becoming so popular in China, which will surely demand more customized service for mobile.” Zhang shows interests in new chances brought by location-awareness, mobile picture and audio messaging. But he still sees the limitation, “It’s hard for users to make any ‘big decision’ on mobile, like academic database search or expensive service buying or what requires repeating check and price comparison before really making a decision.” Dianping will focus on the “rating” and ‘commenting” functions on mobile side. Zhang also said optimistically that Dianping has been faring well. Though it’s mobile and group-buying business haven’t really profited much over the past two years, the whole structure of this popular rating platform has been solidified. With the combination of information, promotion and service, Zhang is confident that the company is well positioned in the sector and will start profiting in a year.