Even the most careful startups can drain their funding on marketing in a tough ecosystem like China. But according to local incubator Chinaccelerator, using WeChat the right way can be the key to slashing costs.
“We focus on Wechat as a platform for low-cost customer acquisition,” says William Bao Bean, the managing director of Chinaccelerator and partner at SOSV (Previously known as SOS Ventures).
Chinaccelerator presented the twelve startups in their most recent batch this week for judging after a 90-day intensive program, where Mr. Bean pointed out that Wechat was now a core marketing tool for the young companies.
“Some of the companies in this batch have no website or application,” he says. Instead, those companies launched on WeChat, attracting users with rich content that integrates with the payment model within WeChat itself.
Mr. Bean pointed out that in the past Chinese companies raised money to spend it on marketing, whereas U.S. companies spend it on hiring great engineers. He now believes that WeChat is helping young companies cut the cost of marketing.
“For these three months there was zero marketing money spent for these companies,” he says. Among six companies in batch 8 that leveraged WeChat marketing, one company was already profitable. Urbem earned $10,000 USD through its Wechat account.
Among the 34 companies that SOSV has invested in this year, 20 of them leveraged content-driven commerce on WeChat. Three adtech startups among this batch were chosen by OMD Innovation Fund (OIF) program to get sponsorship to solidify its position as the leading media agency in China.
3 Adtech Startups Chosen By OIF For Support
Aiming to power eCommerce for physical locations, Magnet is a location-based customer engagement tool that brings ecommerce features to offline retailers. Most offline locations have a very poor understanding of their guests, which often results in poor experiences and lost revenue opportunities. By leveraging location-aware technologies such as Wi-Fi, QR codes and beacons, Magnet connects customers to locations and provides helpful on-demand services. Customers get better experience, while offline shops make more money and get better analytics. Founder and CEO Hank Horkoff previously exited ChinesePod in 2014.
Face8, a mobile advertising platform, provides free wifi, photo printing, ultra fast movie downloads and power charging for airport passengers paid for by advertisers. The company alleviates boredom at boarding gates and provides brands direct access to the most valuable advertising real estate in the world: phone screens.
In the past startups spent their marketing budget on banners, search ads and social media ads. However these days more and more of that budget is spent on content marketing as a better way to engage with consumers. Oz’s software provides content marketers and writers with an integrated dashboard for researching and developing unique ideas. They focus on the first steps of the content creation process, consolidating research and idea generation, revealing connections between seemingly disparate topics and making it easy to save ideas along with their supporting research. Based in Shanghai and New York, the company adopts a SaaS model for B2B clients. Oz is founder and CEO Matt Lovett’s 4th digital content startup.
Wechat-Friendly Startups
Urbem Media was founded with two missions: help mid-to-high-end restaurants by encouraging people to eat out more often; and offer our diners fabulous value and recommendations. Urbem’s flagship product, Urbem VIP Club provides the best VIP privileges at high-quality restaurants in town. Users can type or tell the wechat based app what they want to eat and the app provides corresponding restaurants with favorable deals. “People can join the club for free to become our basic members and our basic members can upgrade to VIP to enjoy better deals and privileges,” CEO and founder Steven Chen says. With 99RMB ($15 USD) VIP membership fee covering six months, the company earned $10,000 USD since their launch two weeks ago.
The current generation in China will encounter new challenges in parenting, and they will need instant, trusted services to help them. Uparenting provides a mobile platform connecting parents and professional parenting practitioners to source trusted, tailored and real-time solutions to daily parenting. Their wechat account now has 11,000 users, and 386 paid users while their video program had over 10 million views on Youku, Tencent Video and Sohu. Founder and CEO Hong Cheng authored a parenting book sold in China.
There are countless independent designers looking for opportunities to show off their projects. Artable is an online crowdfunding platform, which helps fund-raise and promote independent artists and designers from China and around the world. Through Artable’s platform, consumers, collectors and corporates can support and participate at early stage works at a cheaper price.
Compared to Yelp, where users have to go through the stranger’s review to find out quality restaurants, Bestaurant curates the best restaurants by a user’s trusted friends. Bestaurant is a mobile app that lists the best restaurants for people who want to know where to eat in real time. In a beta version released this November, it had seen 11% of users invite five friends or more. The company partnered with Uber Eats, which gives out credits for Bestaurant users. The company monetizes through deals for loyal fans, enterprise accounts, and partnership fees. Founder of Bestaurant, Dominic Penaloza, founded three consumer social startups, including Ushi and WorldFriends.
BitMEX uses Bitcoin to allow anyone to bet on any type of financial asset in the currency of Bitcoin. BitMEX allows investors access to the global markets using Bitcoin through the company’s trading platform. CEO Arthur Hayes was a former equity derivatives trader. Based in Hong Kong, the company gets a transaction fee for each trade and had seen $250 million USD in trading volume on the platform so far.
PartnerGo matches and verifies trustworthy professionals internationally to source, negotiate, and collaborate on cross border real estate transactions. The company aims to increase efficiency by cutting out sketchier middlemen. The company won the first place out of 300 companies at the Innohub Competition in China and was one of the two startups chosen in Asia for the StartupNext competition hosted by Google for entrepreneurs. CEO and founder Tanya Cheng comes from an investment banking background in the UK.
Companies spend billions of dollars to acquire users. Tongdao is a customer engagement platform designed to help mobile-focused companies in China better understand their users and dynamically engage each user in a smart and personalized way. Currently providing web, iOS and Android versions, the company claims that they are the only platform in China that combines real time user behavior data and customer engagement with proprietary machine learning algorithms to keep customers engaged.
TongJuBao’s P2P Protect leverages P2P logic and social-viral models in order to resolve a major customer experience gap, a weak point of the insurance industry. The company has international competitors like Guevara, Friendsurance, but in China TongJuBao is the only company to do adapt P2P to the insurance sector. The company takes a 25% fee cut, much less than traditional insurance companies, and had seen 600 members paying 20,000 RMB ($3,100 USD) in its first week since launching.
With its catchphrase “tutor in your pocket”, the Snapask mobile app provides on-demand academic support by connecting students’ questions to crowd-sourced tutors from top universities,so that learning can take place instantly over one-on-one online sessions. The business model is 200 RMB ($31 USD) for 30 questions and 4 RMB ($0.6 USD) per question for high school students. The company has grown more than 15,000 users around Taiwan, Hong Kong, and Singapore and now users can buy Snapask topup cards from Seven Eleven in those areas. Based in Hong Kong, the team had raised a $1.8 million USD angel investment and a $2.5 million USD series A.
Image Credit: TechNode
