Baihe.com, Jason Tian - OPW Interview

OPW INTEVIEW -- June 21 -- Chinese internet dating sites use mobile billing as their primary billing mechanism.  But the government threw a spanner in the works and capped the amount providers could bill each month. Too many mobile companies were tricking users into signing up for monthly dues. So, there was a big change in the fees that the government was allowing to be charged through telephones. It went from 30 RMB to 10 RMB a month. I recently heard there has been another change; anybody who charges through the phone has to get permission again from the user before they can rebill every month. It has had a big impact on all the websites which were using mobile. Baihe.com used reacted by switching its business model to become a real world matchmaker with an online dating element. - Mark Brooks

How are other dating sites dealing with the imposed limitations for mobile billing?
Actually they don't have a good way to deal with it. Most of the services which are relying on the mobile are now leaving the space. Their profits are shrinking very fast. Mobile payment as a major payment method for online dating companies is shrinking quickly. However, at the same time, online payment is growing fast with ecommerce growing and the banks efforts. In the last year, online payments doubled and it's still growing quickly. Of course, it's still much more complex compared with mobile payments. With online payment growing, we can predict the payment environment will improve for online dating companies.

When we last spoke you have moved very significantly and quickly through to offering real world matchmaking services. How have things changed in the last year since we spoke?
We have made significant progress in offline matchmaking business. Our price increased two times and we are profitable. Our average price is now $1,200.

What services are you offering?
For every candidate we verify their identity and do some communication before they meet each other. We make sure the candidates are a good match. A lot of the customers are afraid that they will be refused by the other candidate. So we provide the pre-date communication and then we arrange the date.

Do you offer any coaching services as well?
We provide some coaching in how to communicate and this is also a paid service. We have one -to-one coaching and some training calls for groups of people. We also published a book this month. Lots of TV stations and newspapers are very interested in this book: "Women Must Marry a Good Husband".

How do you charge for the coaching services?
It's now based on the training class. We charge $40 US per class. At this time, we are designing a new service.  We will provide clients with one year of coaching.

Who does the matchmaking?
For VIP customers, the matchmaking is done by the consultant. They are using our back end assistants to filter the candidates from our user base. For the new product we designed, we will provide a coach to the customer and they will find the candidates by themselves.

What regions do you serve?
We have offices in Beijing and Shanghai. Also we provide remote services for other big cities in China.

What have been the major challenges that you've encountered as you have created this matchmaking service?
We have solved a lot of problems and there are still a lot of challenges. The first challenge was how to build trust. As time passes, more and more customers start to recognize that we are serious about providing this matchmaking service. Almost 50% of our current users are referred by their friends who already used our service. The second challenge is that there are not enough qualified matchmakers. And the third one is in balancing profitability and service quality. The profitability depends on how many customers are served by one matchmaker at the same time. If you assign too many customers to the matchmakers, they cannot handle the workload and the service quality drops down quickly.

How do you determine pricing?
Some customers are very difficult to serve because they are very critical and need a lot of attention. So we developed a system which gives out an estimated cost, the best price to close the deal. The system helps us identify potential personality issues. Actually we cannot decide very accurately for every single person. We can only make the system fair on average. We have some very profitable customers and there are also some customers who are difficult and we lose money. That's much like insurance companies.

How do you measure service and success on an ongoing basis?
The first factor is success rate. Is the client getting married? Are they engaged? Have they decided to terminate the service because they have some commitment with someone? Secondly, sometimes they don't find their right person through Baihe, but still we like to know if our coaching helped them. We measure our service profit, and monitor the attitudes of the matchmakers and whether the service is delivered in time and is meaningful. So we do customer satisfaction surveys every month and decide if the performance is adequate from the service team.

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