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.