Dianping announced to open its data to third-party partners yesterday. AutoNavi, Evernote China, General Motors, Shanda and Garmin are the first companies that can access Dianping’s data with the APIs just released. It is found that, however, third parties who run competing businesses, reviews, group buying, digital coupons or ordering, are not welcomed to use its data.
Developers, after reading the terms of service, don’t find its opening-up friendly that limits are set on the use of data. For instance, third-party services can only show three reviews — no more than 50 characters each — on each merchant’s page. Users have to visit Dianping to see the words left or more reviews.
Zhang Tao, its founder and CEO, expressed a while ago that Dianping wanted to be a platform, not a Yelp-style standalone product (in Chinese). Posed as a service for local life, Dianping started out with ratings and reviews and added various services, such as group buy and check-in, along the way. The company now is promoting the digital membership card which is expected to be a big market that attracted more than a few competitors, such as Tencent’s lifestyle commerce business and Alipay. Mr. Zhang, however, doesn’t think everything can be included into Dianping that they’d not do hotel information for “hotel isn’t a local service”.
Although so many group-buying services have shut down, it is considered a nice match to Dianping. “It is group buy that created the possibility for Dianping to serve merchants with an integrated solution”, said Zhang Tao. He also pointed out challenges: 1) Dianping’s former services weren’t involved in offline commerce, 2) the gross margin of former online services were 90% while the group-buying is only 10%, and 3) it’s hard to move a troop of three thousand employees than that of three hundred.
2012 is a year of mobile growth for Dianping. As of the fourth quarter, its monthly pageviews were over 1.4 billion, with 60% from the mobile app, according to the official data disclosed earlier. Dianping saw big increases in all aspects on the mobile end in 2012: mobile app users reached 54 million, an increase of 170%; group buy transactions through the mobile app grew 20 fold; digital coupon views increased by 106%.
The company decided to shift focus to the mobile end in 2010, and it turns out mobile nicely fits in the companies services. Zhang Tao expects the next three years to continue to be times for mobile growth.
2013 is the tenth year of Dianping. It has been exploring how to monetize the data and users. Having failed on physical membership card at the beginning, the company managed to make some money from coupons and advertising. The company made some profits in 2008 but saw net losses in recent years due to high costs in mobile service development and new services. Group buy is still far from profitable.
Zhang Tao expects profits to come when the frequency of user consumption through Dianping’s coupons, membership card or group-buying service becomes high enough. He saw chances in the mobile Internet and increased demand of the middle class for everyday consumption.
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