QR Code, why it works so well in China?
It all started with a podcast
I was listening to Design Details, feat. Meng To, and he shared some interesting stories from traveling around the world. Suddenly, a brief conversation caught my ears.
I just don’t get QR codes at all, but apparently it works in China.
Really?
Yes.
Wow!
Wait, you don’t get QR code?
That’s quite surprising (to me). Coming from a country that QR code is literally everywhere, I used to scanning computer screens, posters in subway, restaurant tables, and goods in supermarket. The simple scan brings large convenience — making payment, joining social network, getting discounts, attaining information, and so forth.
But on a second thought, I realized that I hadn’t scanned a single code since coming to the US last September. This sharp contrast triggered my initial curiosity. Then I looked back on QR code’s emergence, evolvement, and its role in today’s China. To my surprise, this black-and-white box is so important and it’s the apple of the eye of China’s tech giants, as well as countless merchants.
Why it’s a thing?
QR code was born to the best time in China – Mobile internet usage is out of roof, and O2O is the biggest pie of e-commerce.
Scanning QR code is almost exclusive on mobile devices, and it’s so common among Chinese people. It became a lot more interesting when putting it in the context of China’s out-of-roof mobile internet usage numbers. As of June 2014, China’s mobile internet users reached 527 million, out of a total number of 632 million. The increasing speed is also amazing — China tacked on 14 million new internet users and 27 million new mobile internet users in just six months.
From Google trend, we can see that O2O is getting more and more popular, and even catching up with B2B. Though living in the US, I could still feel the O2O tornado is sweeping over China. My tech news feed is piled up with O2O everyday - Just within last week, Baidu invested $100 million in O2O laundry service Edaixi, and JD.com, who makes Amazon.com hard to thrive in China, invested $700 Million In Chinese Supermarket Chain Yonghui. Not only giant companies, startups are also coveting this big pie. Though QR code wasn’t first born out of O2O, as a tool whose function is to connect offline and online, it’s largely valued as a powerful weapon to kick open the online-offline gate.
Uncovering the reasons
From zero to full blossom, QR code has a rich story.
- In the early phase, WeChat made it a built-in feature and brought to millions of users. It was later wisely used as part of Tencent’s O2O strategies.
- As O2O became almost a mania, more tech giants realized QR code’s high adoption and its powerfulness. They reinforced this concept by integrating it into their products.
- One interesting fact is that it wasn’t those giants that were actually pushing QR code to population. It was the countless merchants who use QR code to advertise.
- And jumping out of the business world, I’d like to examine some underlying cultural factors.
WeChat gave QR code a strong rise
Where did you first learn about QR code? If you ask a Chinese that question, I bet nine out of ten would say WeChat. With 5 hundred millions monthly active users, you would never overemphasize WeChat’s importance in the rise of the QR code.
In September 2012, WeChat released v4.3 that came with a built-in QR code scanner. It supported scanning all types of QR code and enabled a variety of ways to interact with WeChat. The scanner largely lowered the behavioral barrier of scanning for WeChat users, which by that time had reached a number of two hundred million.
In the same month, Huateng Ma, the CEO of Tencent, indicated that QR code and O2O would be the biggest opportunity of mobile internet on China’s Internet Conference 2012.
With all Tencent products, we’ll strongly push QR code, and it will become the key entrance that connects online and offline. WeChat is strengthening this feature. We hope to turn scanning QR code into a widespread idea for common people.
Tencent really did. In February 2013, WeChat strengthened QR code by adding more social functions to it. It broke the traditional process of joining group chat – searching group ID, sending request, and waiting for approval. Now, group chat could generate its own QR code, and with a simple scan, you are in. This feature made group chat a lot easier to start and organize, and people adopted it really fast. By that time, QR code had became a common idea for most WeChat users.
Competition between tech giants reinforced the concept
After giving QR code the initial rise, WeChat kept improving its performance and making a seamless experience, such as enabling long-press recognition. Meanwhile, other tech giants, such as Alibaba, Baidu, and Sina, realized QR code’s power, and they added a built-in scanner to their own Apps one after another. Now, it’s unlikely that your smart phone stands without a scanner.
To make good use of QR code, tech giants built their own strategies. For example, in June 2014, Alibaba Group Launches Comprehensive Strategy to Broaden and Diversify the Use of Scannable Codes.
Our aim is to broaden the applicability and usability of scannable codes so that users can easily be connected to additional services and content, as well as to create multiple gateways and touch points into our ecosystem via any mobile device, anytime, anywhere. We hope this initiative will give consumers the ability to unlock more personalized, customer-oriented potential from their shopping and entertainment activities via our platforms and services, as well as help our merchants to deepen their engagement and interaction with customers.
— Daniel Zhang, COO of Alibaba Group
Alibaba Group’s 11.11 Shopping Festival is a good manifestation of how the strategies were implemented. During the festival of last year, consumers could scan product QR codes on their mobile phone from more than 300 brands, including Uniqlo, Toys “R” Us and Gap. They could add items directly into their virtual Tmall.com shopping carts across 30,000 brick-and-mortar stores. This activity highly drove the QR code knowledge and acceptance among common people.
It is the merchants that actually pushed it
The prosperity of QR code is not a contribution solely of tech giants. As platforms, Alibaba’s Taobao and Tencent’s WeChat actually share a common nature in the field of scannable code. It empowers merchants to promote in the offline world, and enables customers to access all services that merchants developed on this platform. Merchants finally establish a point-to-point connection to its customers, and for the first time, they played an active role in the internet world.
No matter it’s Taobao or WeChat, the online space is limited after all. But offline space is unlimited. With QR code, merchants are able to advertise at various places. Also, merchants and e-commerce platforms are able to direct traffic to different devices. To see what roles QR code are playing in current China, a friend of mine in Beijing helped me to gather scenarios where QR code existed in his daily life. Though we understood that QR code is popular, we didn’t expect that it’s such pervasive. Let’s take a look at what he found within only two hours.
Culture may contribute to QR code’s prosperity
For Chinese people, especially those don’t know English, scanning code is much easier than typing in English letters. Entering url may be intuitive for people from English-speaking countries, but it’s not the case in China.
Another reason (assumption) is the “squared” shape of QR code contributes to its high-level acceptance. Why? I guess you are wondering about that. So thinking about Chinese characters, does it look like square boxes sitting next to each other? What’s more, the squared shape resembles Chinese seal, which has been symbols of identity and authority over 2,500 years. Nowadays, there are still many people making customized seal and stamping it on documents or artworks to leave their mark.
Li Lanqing
This squared shape inspires lots of creative design. Let’s enjoy some eye candies.
Looking at the future
Cyberspace Administration of China
As far as I’m concerned, QR code’s future is highly tied up with China’s mobile internet development and O2O business. One factor that should never be ignored in China is the government. It has the biggest say.
Back in February, China Internet Network Information Center (CNNIC) published the 35th China’s internet development report. It claimed two major points that
Mobile e-commerce applications boosts, it has become the major force.
Instant messaging usage steadily increases over time, reaching a number of 91.2%. Mobile internet games shifts from boosting to steadily increasing, and it’s expected to expand further in 2015. Mobile travel booking users has increased to 194.6%, and it’s the fastest growing one among mobile business applications.
Huge potential exists in O2O, with urgent requirements in medical care and domestic service market.
O2O companies have already deployed in China’s major cities, with medium and heavy users taking up a total of 39.2%. Consumption is shifting from improving quantity to quality. Deployment in second and third tier cities has started. The huge consumption potential will prompt O2O market into an incremental growth.
Meanwhile, dining and entertaining O2O began earlier. Their marketing models have became almost mature, and now they are heading to service refinement. Medical and domestic O2O has just started out, and there’re huge user requirements in those fields. So they’ll become a rather large part in the future.
To gain a better idea of how much O2O has penetrated in today’s China, we shall look at the story of Lyliang , a remote city of Shanxi Province on the Loess Plateau. To my big surprise, O2O is blossoming in this five, or even six, seven tier city. For example, the convenience stores have changed their name into “O2O experience store”. There are around ten thousand O2O experience stores in Shanxi province, and lots of farmers are taking part in this O2O wave.
Tech Giant Tencent
Besides the government, tech giants are also promising a bright future of mobile internet and O2O with their business strategies. Amongst them, Tencent is playing the main role.
Back to March 2015, Tencent summarized their strategy for 2014 and announced the year 2015. Here’s my unofficial translation:
In 2014, we focused on “connection” - connecting our users with contents, services and hardware, and therefore to improve online and offline quality of life. In 2015, besides developing current business, we are going to build a more vibrant mobile ecosystem. We want to bring our own and partners’ products and services to Chinese consumers. Strategies to build this ecosystem includes:
- Collaborate with current and potential partners in various vertical markets, and bring better O2O and transaction services to users;
- Collaborate with major content providers (e.g. Internet literature author, HBO, NBA, SONY Music, Warner Music, YG Entertainment) to develop our digital content business;
- While balancing user experience, we are going to promote Ad business by adding mobile Ad storage, optimizing Ad tool and expanding Ad client base;
- Enrich payment scenarios to make our payment service more welcomed.
Summary
China’s mobile internet usage and O2O wave make QR code a valuable tool for platforms to connect offline and online world, to merchants in creating business opportunities, and to consumers in improving the quality of life. Its application and placement enable a great deal of possibilities. Looking at the future, I’m excited to see what changes this black-and-white box would bring to China.
We’ll see.
