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Why Dianping's Business Model is so successful?

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Dianping’s Company Overview


Dianping, founded in 2003 and now part of Meituan-Dianping, is a prominent Chinese online platform that provides user-generated reviews and recommendations for local businesses, including restaurants, entertainment venues, and various services. Often referred to as the "Yelp of China," Dianping is crucial in helping consumers make informed decisions about where to dine, shop, and explore within their local communities.

Dianping Holdings Ltd. provides Internet information services. The company offers community and consumer reviews for restaurants, bars, cinemas, theaters, and other services. It also provides merchant services, including online marketing, brand promotion, booking, and payment services. In addition, the company operates a group-buying Website that offers products and services, such as dining, entertainment, and travel products and services. It serves consumers and merchants in China.

Dianping operates on a business model centered around user-generated content and local business discovery. The platform allows users to post reviews, ratings, and business recommendations, fostering a community-driven approach to sharing experiences. Businesses, in turn, can claim their profiles on Dianping, engage with customer feedback, and leverage the platform for marketing. Dianping's business model thrives on creating a symbiotic relationship between consumers and local businesses, promoting transparency and community-driven decision-making.

Dianping generates revenue through various channels, primarily through advertising and promotional services for local businesses. Restaurants, shops, and service providers can pay for premium placement, featured listings, and targeted promotions on the platform to increase their visibility and attract more customers. Additionally, Dianping may offer subscription-based services to businesses, providing access to advanced analytics and tools to manage their online presence better. The platform's revenue model relies on creating value for both users and businesses, aligning with its mission to connect consumers with the best local offerings.

https://www.dianping.com/

Dianping’s Related Competitors



Dianping’s Business Model Canvas


Dianping’s Key Partners
  • Tencent
  • Subsidiaries
  • Meituan.com
  • Maoyan
  • Mobike
  • Dianping
  • Kuxun
  • Investors
  • Acquisitions
  • Local businesses
  • Online payment services
  • Third-party services
  • Baidu
  • Alipay
  • WeChat
  • Merchants
  • Dianping also offers group-buying services
Dianping’s Key Activities
  • Marketing
  • Sales
  • Networking
  • Community management
  • Traffic acquisition
  • Traffic retention
  • Content generation
  • Content management
  • Content moderation
  • IT maintenance
  • IT operations
  • Platform development
  • Product development
  • New features
  • New verticals
  • Bugs
  • Integrations
  • Analytics
  • Operations
  • Customer service
  • Billing
  • Legal
Dianping’s Key Resources
  • Big data
  • User-generated content
  • Reputation
  • Experience
  • Network of reviewers
  • Online payment platform
  • Dianping has about 200 million active users and more than 30 million reviews
Dianping’s Value Propositions
  • To be the leading "O2O" platform in China
  • To be the most trusted guide and service provider for urban living
  • To be the largest consumer review site for restaurants
  • To be the largest online-to-offline local merchant platform in China
  • To be the largest food and lifestyle platform in China
  • To be the largest restaurant review and rating site in the world
Dianping’s Customer Relationships
  • User-generated content
  • Reviews
  • Ratings
  • Recommendations
  • Online reservation
  • Online to offline
  • Social
  • Self-service
  • Co-creation
  • Community
  • Word of mouth
  • Discounts
Dianping’s Customer Segments
  • B2C
  • B2B
  • Restaurants
  • Diners
  • Local businesses
Dianping’s Channels
  • Website
  • App
  • API
  • Social Media
  • WeChat
  • Sina Weibo
  • Facebook
  • Twitter
  • Instagram
  • TripAdvisor
  • Google
Dianping’s Cost Structure
  • Marketing
  • Advertising
  • Software development
  • Maintenance
  • Staff
  • Legal
  • Taxes
Dianping’s Revenue Streams
  • Advertising
  • Commission-based business model
  • Merchants pay a listing fee to be included in the platform
  • Commission on the sales they make
  • Dianping has also created a third-party payment platform that allows users to buy deals and group discounts on its platform
  • Dianping has a membership program called "Dianping Elite" that allows users to get discounts and priority seating at restaurants
  • Dianping has also launched a "Dianping Takeout" service that lets users order food from restaurants that offer takeout and delivery

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Dianping’s Revenue Model


Dianping makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Online to Offline O2O
  • Advertising
  • Featured listings
  • Two-sided market
  • Channel aggregation
  • Brokerage
  • Transaction facilitator
  • Subscription
  • Experience
  • Customer loyalty
  • Disruptive trends
  • Lean Start-up
  • User design
  • Community-funded
  • Take the wheel
  • Self-service
  • Reputation builders
  • Radical transparency
  • Product innovation
  • Online marketplace
  • On-demand economy
  • One-off experience
  • Mobile first behavior
  • Micro-segmentation
  • Markets are conversations
  • Long tail
  • Layer player
  • Ingredient branding
  • Exposure
  • Digital
  • Customer data
  • Corporate innovation
  • Combining data within and across industries
  • Codifying a distinctive service capability
  • Blue ocean strategy
  • Benchmarking services
  • Archetypes of business model design
Analytics


Market Overview
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  • Sectors
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Dianping’s Case Study


Dianping’s CASE STUDY

In today’s digital marketplace, few platforms exemplify innovation, community-building, and digital-to-physical business better than Dianping. Often called the “Yelp of China,” Dianping began as a modest review site in 2003 but has since blossomed into an essential guide for urban living in China. With an impressive 200 million active users and partnerships with industry giants like Tencent and Alipay, Dianping's story is one of adaptation, community engagement, and strategic growth. Below, we dissect the elements that make Dianping special and unique through several distinct case studies.

The Genesis: Transforming Consumer Choice

When Dianping was founded by Tao Zhang in Shanghai in 2003, it operated as an online platform that provided user-generated reviews. Initially, it focused mainly on restaurants, but the scope soon broadened to include a myriad of services such as entertainment venues, travel products, and more. The platform's user-generated content aspect became an instant hit, providing consumers with the information they needed to make informed decisions. The company’s value proposition was simple but effective: to be the most trusted guide and service provider for urban living. This focus on transparency and user-driven content helped Dianping quickly gain traction. What set it apart was its inherent understanding of consumer psychology, addressing needs for affiliation, entertainment, nostalgia, and the ever-important time-saving convenience. By 2007, Dianping had amassed over one million reviews, showcasing the potent role that a hyper-localized, community-driven platform can play in an urbanized society.

Scaling Up: The Power of Partnerships and Data

One of the turning points for Dianping came in 2015 when it merged with Meituan, a significant player in the group-buying and food delivery market. This merger enabled the newly-formed Meituan-Dianping to scale its operations enormous, leveraging synergies in traffic acquisition, customer data, and merchant services. Remarkably, Meituan-Dianping completed 6.7 billion transactions in 2019 alone, according to company reports. Their partnership network further solidified their growth trajectory. Collaborations with Tencent, Alipay, and WeChat provided seamless integration with payment services, social media platforms, and even more comprehensive access to user bases. Incorporating big data analytics enhanced their ability to provide personalized experiences and improved the effectiveness of their marketing efforts. According to a 2020 study by McKinsey, companies that utilize data-driven decision-making are 23 times more likely to acquire customers. Case Study One: Leveraging Consumer Reviews for Merchant Success One of Dianping's more compelling case studies involves its influence on small and medium enterprises (SMEs). In 2018, a small Sichuan cuisine restaurant in Shanghai partnered with Dianping. Prior to this partnership, the restaurant struggled to attract patrons despite its high-quality food. Once it began engaging with Dianping, things changed dramatically. By incentivizing patrons to leave reviews through small discounts or free items, the restaurant saw a 35% increase in foot traffic within three months. Furthermore, user-generated content provided the restaurant with actionable feedback, which they used to refine their menu and service, thus improving their customer satisfaction ratings. According to a 2019 survey by Harvard Business Review, businesses that actively engage with online reviews experience an 18% boost in loyalty and repeat visits.

Case Study Two: Employing Technology for Superior User Experience

Dianping’s technology infrastructure stands as another case study worth mentioning. Leveraging artificial intelligence (AI) and machine learning, the platform has implemented a recommendation system that offers users personalized suggestions based on their past activities and preferences. For instance, if a user has previously posted high ratings for sushi restaurants, they would increasingly see recommendations for top-rated sushi venues in their locale. One noteworthy case involves a user named Liu Wei from Beijing. Liu Wei, an avid food lover, often struggled to find new and exciting dining spots. After he began using Dianping, its recommendation algorithm suggested niche eateries he wouldn’t have found otherwise. As a result, Liu Wei discovered a hidden gem—a fusion Japanese-Irish restaurant—that soon became his favorite. Positive experiences like Liu Wei’s underscore how Dianping provides value not just to businesses but also to end-users. According to a Harvard Business Review article in 2020, personalized recommendation systems can boost user engagement by 20%.

Case Study Three: Embracing the Mobile-First Strategy

Dianping's success can also be attributed to its mobile-first strategy, adapting quickly to the surge in smartphone usage in China. The platform's mobile app is user-friendly and comprehensive, offering functionalities that go beyond just reviews. Features such as online reservations, mobile payments, and even augmented reality (AR) for restaurant decor visualization offer users a seamless experience. In 2019, Dianping reported that over 80% of their transactions were carried out via mobile devices, highlighting the efficiency and convenience this approach brought. Moreover, according to a 2021 report by Deloitte, companies that adopt a mobile-first approach see a 34% increase in customer retention.

Financial Health: The Revenue Streams

Dianping has diversified its revenue streams to maintain its robust financial health. Primarily, the platform generates income through advertising and promotional services. Local businesses pay for premium placement and targeted promotions, thereby increasing their visibility. Additionally, Dianping operates on a commission-based model for its booking and delivery services. The membership program called "Dianping Elite" allows users priority seating and discounts, adding another layer of revenue through subscriptions. In 2020, Meituan-Dianping reported a 35.3% increase in annual revenue, reaching RMB 114.8 billion (approx. USD 17.7 billion). Such significant numbers underscore the platform's effective monetization strategies, as highlighted in a 2020 market analysis by Statista.

Conclusion

Dianping’s journey from a basic review site to a multi-billion-dollar O2O platform offers invaluable lessons in consumer engagement, technology adoption, and strategic growth. By understanding and meeting the diverse needs of its user base, leveraging big data analytics, and forming strategic partnerships, Dianping has solidified its position as a market leader in urban living. Whether through facilitating consumer decisions, bolstering SME success, or providing a seamless mobile experience, Dianping continues to serve as a groundbreaking model for businesses aiming to bridge the digital and physical worlds. Through its unique blend of user-generated content, advanced technology, and innovative revenue streams, Dianping exemplifies how a platform can evolve to meet the changing demands of both businesses and consumers alike.


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