Dianping: Mixing the Secret Sauce of Reviews, LBS and Group-buying

Dianping for a long time has been very focused on becoming the “best local city life guide to primarily white collar workers in China” says Michael Jiang, VP of Product and Operations of Dianping.

For merchants or the local businesses that list on Dianping, “for the last 8 years, we have been trying to give comprehensive targeted marketing solutions.” If you are a small new business starting out, getting momentum of repeat customers is always difficult. For many local Chinese businesses that are not marketing savvy but are very good at what they do, sites like Dianping work very well to market to millions of consumers.

Reviews, LBS check-in’s, group-buying – how it adds up well for Dianping

With the proliferation of mobile internet services, reviews, check-ins and group-buying are increasingly integrated to many apps. Soon it will become difficult to differentiate them all. But according to Michael, “it all adds up perfectly into our existing model.”

3 different needs from Merchants

1. Fill in capacity: “If you are a merchant, the most important thing is to get customers. If your store is new, or your business is doing alright but has a lot more capacity you need a large amount of traffic in a short time and group-buying fills in this capacity does this.” The quick-win to merchants is a low cost of acquisition per user with a high volume of users in a short time.”

2. Build loyal customers: “You can’t rely on the group-buying model as your primary marketing solution because it hurts your margins. So we offer paid search ranking (so users can see your listing first), we offer coupons of 10% discount which is a very healthy marketing solution.” Reviews and feedback is another way for users to trust the store and see what other people experienced.

3. Connect with customers: “LBS (location based service) is great way to interact with users and improve the relationship. In Shanghai, we did a successful campaign with Dairy Queen where if you check-in you can get a discount. Another thing we did to gain repeat purchases was to create a discount membership system through verified check-in.”

“Dianping’s advantage is that we can provide a total online marketing solution to the local merchants and there is nobody else who can offer the same. We have a huge user base, independent user review platform and a stable advertising method through coupons or group-buying. If there is someone else who only does group-buying, why would you use them? Dianping also has a very strong brand and expertise to manage campaigns.”

Ensuring integrity of Reviews

“In China, in some areas and categories we have seen some serious issues with credibility. There are merchants that try to short-cut or pay for good reviews or they want us to delete bad reviews, but they are not the majority. The fundamental principle of Dianping is that we are an independent review platform. We do have a strong team that specializes in ensuring the integrity of information but we can’t guarantee that we will catch all fake reviews.”

Dianping is open about buying an LBS

“We are very open about growing our team and if the people are right and fit the team, M&A could happen if the synergy is there. We need to keep growing our team from all aspects from R&D, Product, Marketing and Sales.”, says Michael.

Dianping has today 30 million unique visitors per month and 6 million mobile users. More than 50% of the mobile users are active and tend to view and review more. Last quarter, 50% of coupons were redeemed from mobile and it is expected that mobile page views will surpass web views in the near future.

There is no doubt that competition is heating up at the intersection between reviews, group-buying, LBS check-in sites. But with Dianping’s large ready inventory of merchants and users, they are a very strong contender to be the winner.