Entrepreneur Magazine: Why the rice OpenTable can't learn

Article | "Entrepreneur" reporter Fanghao as the first U.S. company to land on Nasdaq in 2009, OpenTable's business model, while defining the online ordering industry, also allowed its Chinese apprentices to experience the huge difference between the "table business" between China and the United States. This sentence is particularly useful in OpenTable. For a network-ordering company that accompanied the dot-com bubble at the end of the last century, it has watched too many competitors collapse, dinnerbroker.com, foodline.com, ireserve.com, Iseatz.com and restaurantrow.com have long since closed.　　Yet another competitor, Yelp, which has been buoyant but flat, has heard news of a possible takeover of open table. A successful IPO at the coldest time of the capital market, with a price-earnings ratio of at least 300 times times the market value of $600 million. What is the OpenTable's survival cheat?　　Will China be the birth of its own "OpenTable"? Killer in the current online ordering market, there are two basic types of companies: One is the Li Hua fast food as the representative, the Internet as a sales channel, no store operation of the end to end of the catering company, they play the role of both producers and service players, the other is a pure "middleman" (middlemen) role, Help the restaurant (Seller) Find diners (Buyer) and help diners (Buyer) Buy items (book restaurants).　　OpenTable, Yelp and China's rice network, the public comment net and so on basically belong to this camp, eat network CEO Sanli said, do is the bilateral market: one side is the restaurant, side is the consumer. In fact, in the latter camp, the company's profit model is not the same: Yelp and China's public comment network is very similar to a third party city consumer comment platform, mainly to restaurants, dishes and cooks a variety of reviews.　　They belong to Web2.0 's catering web site, where most of the revenue comes from restaurant advertising and corresponding membership fees, where ads are mainstream. And the rice network with a few years ago in Osaka listed Japanese catering website bubbling Mummy (Gudumami) belong to Web1.0 website, but the main business of the two is also different: The basic Food Network depends on order services, membership fees and advertising costs, and bubbling mummy's main business is to help restaurants carry out various promotional activities,　　A significant portion of this activity is done online, through promotions and training to collect fees. The reason why OpenTable became OpenTable is that it is completely different from the business model of the company. Although OpenTable also has its own reservation site, it is actually a software-as-a-service (SaaS, software-as-service) Company: it sells a meal-ordering software to restaurants, with the help of this softSystem, Open table provides services for the restaurant, including: the need to order the customer's meal specific to the time (1 or 1:15), Location (window or corridor), price (whether there is a discount) and so on factors, and then provide convenient and rapid booking.　　And it helps restaurants do targeted email marketing. At present, of the total income of OpenTable, 54% comes from the monthly fee of the restaurant, 42% from the commission of each order, and 4% from the initial installation fee of the software for the restaurant.　　According to the 10-month earnings of open Table2008, its 8,090 members (the restaurant that installed its software system) contributed a total of 37.5 million dollars to their revenues, meaning that each restaurant would contribute about $281 a month and a $243 order Commission per month. If you order through the restaurant's website, OpenTable will charge a 0.25-dollar deposit to the restaurant, and 1 dollars if it is through OpenTable's website. In 2008, about 57% of the diners completed their appointments through OpenTable's website, and the remaining 43% were through their own websites.　　It also shows that the OpenTable website itself is a good marketing tool, and it can certainly double the number of restaurants that are catering and ordering, compared to software companies that simply offer solutions to restaurants. In the same 10 months, OpenTable added 1397 member restaurants, bringing in 1.7 million dollars in revenue, which means the current software system's initial installation fee is about 1240 dollars.　　Thus, OpenTable is almost a network-ordering company that does not rely entirely on advertising, which indirectly explains the popularity of capital markets in a slump in which advertisers generally cut back on budget spending. By contrast, the traditional network-ordering model, which focuses on popularity as the main means of promotion and advertising as the main source of profit, remains uncertain.　　Yelp's consumer membership is 6 times times that of OpenTable, but after the latter's successful IPO, the Yelp CEO, in addition to not denying the possibility of deep cooperation between two companies, simply said that Yelp will not be able to IPO until 2010 at the fastest. OpenTable is not the only one by one companies in the United States that can offer a meal-ordering software system, but it may be the only one by one companies that occupy high-end restaurants. A 1240 dollar one-time installation fee, plus a total of 515 dollars a month of rent and deposit, so that many small and medium-sized restaurants can only be deterred.　　At present, the catering for small and medium-sized restaurant software generally only sold dozens of U.S. dollars, but only stand-alone version, and did not opentable such a network background to achieve networking. All along, OpenTable in the choice of customers are adhering to the high-end and business routes. In this quite research on the Rice network CFO Zhaoqin said that OpenTable's appointment in generalRequires a two week advance, because some locations are inherently irreplaceable resources, "there is a bar in Times Square in the United States, and if you want to be in a very good position, you have to book six months in advance." "At present, OpenTable accounted for only 20% of the meal service in northern California State, accounting for 6% of the entire United States."　　But it is clear that a stable high-end customer base is also an important guarantee for OpenTable to resist the depressed economy. U.S. national conditions vs Chinese characteristics OpenTable's successful listing has stimulated the great enthusiasm of Chinese colleagues, one industry personage even vowed to say, "Within three years, China must have a reservation website to achieve ipo!　　"However, OpenTable and the rice network, the public comment net these Chinese counterparts in the consumer culture is a big difference. Sanli Frankly, "the biggest enemy of the rice network is not competitors, but our consumption habits."　　"This consumption habit comes from both ordinary consumers and restaurants," he said. First, Chinese and western consumers have very different thinking habits about how to order. In China, in addition to major events (weddings and business receptions, etc.), very few people in advance many days to book table, and in the United States is different, the appointment has long become a social culture, even if a restaurant is not hot, consumers are accustomed to advance reservations. Rice Network survey of Japanese and European and American restaurants, found that even if the restaurant is not a table, people are accustomed to call first to the restaurant before they can go. "From the Chinese point of view, very unaccustomed."　　"Sanli said. According to the National Catering Association, about 13% of Americans booked online in 2007, and only Pizza Hut's online booking amounted to $1 billion. China currently has less than 1% of the total population to order meals through the Internet.　　Especially for OpenTable, because its main user group is the business community, so more attention to time planning. Second, many Chinese restaurants do not favor the ordering software. "Compared with foreign restaurants, domestic restaurants would rather spend money worshipping Guan Gong guan than advertising, not to mention the purchase of meal-ordering software," he said.　　"In Huang Shenli, vice president of Huaxing Capital, this is a difference or gap in operating consciousness." There was a time when the network also tried to promote a client software to its restaurant users, but soon discovered that the pattern was unrealistic. "Compared to the human cost, this kind of system on the line may mean the increase in restaurant costs, because you have to train staff, to buy hardware and software."　　"Sanli said. In fact, China is not without opentable followers, the bean net is an obvious example. Unlike OpenTable, it is not for guests to order meals in restaurants, but for fast food outlets demand the delivery of information solutions, that is, ordering software. This set of food and beverage Enterprise Edition software developed by the Bean net, has realized the online upload menu, management of silver, meal delivery staff management, delivery time to reach, delivery range, special dishes recommended, and the shopkeeper online communication functions, for the restaurant to realize the information, but, the bean-net profit modelIt's just a sales split with a fast-food restaurant, which is now almost free.　　The reason is simple, the market does not agree with the charging method. In addition, many Chinese restaurants turnover or close the frequency of high, the market is very unstable, which is also difficult to promote the booking software one reason. According to the Chinese Culinary Association survey data, in the catering industry, the average monthly 8% of the restaurant will be closed, while 10% new stores.　　So many low-end restaurants are not willing to put too much cost into this, from the perspective of risk control. These very Chinese-style consumer culture, the birth of a Chinese-style network ordering mode: Because the human cost is very low and accustomed to telephone and other traditional way of ordering meals, such as rice network, such as meal order site 60% orders are achieved by telephone (call Center), with the help of this traditional mode of ordering, The rice net to obtain the return point. And that brings a opentable problem: Sometimes it's hard to make sure the order is true, how many people have gone, how much has been consumed, and so on, because you don't have a record to search for. "The phenomenon of restaurant escapes is very common in the industry.　　"Taste NET CEO Dengyongqian frankly. In order to control the risk to a minimum, the rice network in the domestic first take the form of membership fees, that is, to those small size, order receipt of volatile small and medium-sized restaurants charge a one-time annual fee. At present, the Rice network has three revenue sources: advertising, return points and membership fees. It is said that the revenue of the 2008 Rice marketing in the 10 million yuan. "The three-dollar business is basically equal.　　"Sanli said. But in any case, the environment is moving in the direction of digital catering. According to the Ministry of Commerce statistics, 2008 retail sales of China's catering industry reached 1.5 trillion yuan. Due to the fierce competition, the restaurant industry hundred profit margin has fallen to 13%.　　The chain and the characteristic has already become the mainstream of the catering industry development. Focus on the food industry digital Ao Wei Information Technology Co., Ltd. General manager Konglingbo also believe that for the OpenTable model, the domestic counterparts do not have to completely imitate, do not have to completely reject. "Network platform operators must be able to keenly capture the changing needs of hotel owners and the needs of their diners, and the introduction of the appropriate form of service; Find ways to help hotel owners make more money and save more money to meet other needs that diners may have to eat, so it is possible to speed up the market acceptance of this mode of operation. ”