Dianping Leans on Tencent’s WeChat in Hunt for New Users

Dianping.com is boosting its reliance on Tencent Holdings Ltd. (700)’s smartphone applications as the operator of a Yelp Inc.-like website in China seeks to add users from inland cities.

The company, based in Shanghai, is targeting smaller, less developed cities away from the metropolises closer to the coast such as Beijing and Shenzhen, co-founder Edward Long said in an interview. There were 369 “emerging” cities in China accounting for about a third of the urban gross domestic product, according to a March 2012 report from McKinsey & Co.

Dianping customers have boosted their use of Tencent’s payment service since Asia’s largest Internet company in February acquired a 20 percent stake in the website that offers user reviews of restaurants, Long said in Tokyo July 11. The location-based food and entertainment services software, which comes pre-loaded on some versions of Tencent’s WeChat messaging service, allows users to share reviews.

“The value of WeChat is its vast coverage in the third-tier and fourth-tier cities,” Long said. “Previously we haven’t done well in less developed cities located in middle west and west China. WeChat can help us reach users in these less developed cities.”

Photographer: Tomohiro Ohsumi/Bloomberg

Long Wei, co-founder of Dianping.com. Close

Long Wei, co-founder of Dianping.com.

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Photographer: Tomohiro Ohsumi/Bloomberg

Long Wei, co-founder of Dianping.com.

Long said the number of Dianping users paying for meals through WeChat’s system is “catching up” with Alipay, the nation’s largest third-party payment system. Long declined to disclose precise figures.

Mobile Users

Dianping’s mobile app users surpassed 150 million as of June, according to Long. Its active monthly users rose 86 percent in the second quarter to 130 million from a year earlier, he said.

The company had more than 36 million reviews covering about 2,300 cities as of the end of June, according to its website. More than 80 percent of its monthly page views come from mobile users.

Dianping is working on an initial public offering in the U.S., and could raise about $500 million to $1 billion, people with knowledge of the matter said in June.

“The IPO is a must pass target,” said Long, declining to provide more details.

Zhang Tao, Dianping’s founder and chief executive officer, said in October that the company may be worth more than $10 billion, and he would prefer a listing in the U.S.

Dianping, founded in 2003 in Shanghai, offers search services for local businesses that include consumer-generated reviews. Users can also buy coupons and enjoy group discounts in the same way as on Groupon Inc. (GRPN)

Photographer: Tomohiro Ohsumi/Bloomberg

Long Wei, co-founder of Dianping Holdings Ltd. Close

Long Wei, co-founder of Dianping Holdings Ltd.

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Photographer: Tomohiro Ohsumi/Bloomberg

Long Wei, co-founder of Dianping Holdings Ltd.

To contact the reporters on this story: Grace Huang in Tokyo at xhuang66@bloomberg.net; Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Aaron Clark, Subramaniam Sharma

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