After the hype of online-to-offline concept, doers have accumulated experience in having offline merchants go digital. Xu Lei, Buding’s CEO revealed on ChinaBang 2013 that behind the newly launched KFC E-coupons actually were long-time negotiation of two years. Buding is an E-coupon distributor, and also a portfolio company of Innovation Works who has covered as many as 200 cinemas throughout the country.

After dealing with offline merchants for all these years, Xu shared some points on the value of the check-in functions recently,

 

What really matters to me is whether the core service of a product can create any value and how it ever makes it? The function of check-in, for instance just couldn’t be called a success to me. It’s actually pretty difficult to create value for either the merchants or us.

When we negotiate with the offline merchants, once we were told that they just don’t want their customers unaware of the coupon information when they arrive. I actually assume coupon by check-in is a kind of price discrimination on customers who have different information channels. Why customers who get informed differently should be treated differently? Some just need a simple gesture with their information channel, and they can enjoy the coupons while some cannot. I really find this way of marketing quite unreasonable.

For the customers who come to the shops by their own, coupons are not needed. Discounts and coupons are meant to attract potential customers who are far to reach before. The model of check-in is only reasonable when coupons are given to customers who have checked-in for several times, which is nearly impossible. Who would go to a certain store for like fives times, just to get a free drink? Every click from a user means a decline curve, the more you make them click, the further the curve goes down. What’s more, check-in is an activity which time is involved, for example if users need to check-in 5 times within a week we are more likely to lose that user in the future. By conducing this mind of campaign, both the merchants and we will be over-consuming our user base. So even this business model is logical in theory, it still meets difficulty growing into a great one. That’s what I think of the check-in functions in the local life services.”