When pigs fly: a Taobao-like crowdsourcing platform reshapes its business model

Zhu Bajie is a half-human half-pig character in one of the Four Great Classics Novels, Journey to the West. Among his many abilities is to “tengyun”, or mount a cloud and fly.

The company we’re introducing today is called “Zhubajie”. It has gone through comprehensive changes to its business model seven times; the company calls every big change a “Tengyun Campaign”.

Founded in 2006, Zhubajie is a crowdsourcing platform to connect mainly SMEs and individual entrepreneurs to a wide range of individual service providers, including software developers, graphic designers, web designers, translators, and interior decorators.

It provides services that cover over 600 branches under eight major categories: graphic design, website construction, marketing, copywriting, animation and videos, industrial design, architectural design, and decorative design.

“As a platform offering non-standardized services to meet infrequent demands, we didn’t have many examples to follow at the beginning. Scaling up the platform and innovating our products involved a strong element of trial-and-error along the way,” said Zhu Mingyue, founder and CEO of Zhubajie.

Zhu Mingyue, founder and CEO of Zbj.com (photo from Zhubajie)
Zhu Mingyue, founder and CEO of Zbj.com (photo from Zhubajie)

But Zhu soon found that mere product innovation was not sufficient, as users tended to avoid paying commission and leave the platform once they privately set up contacts. Instead of earning a one-off commission fee, Zhubajie seeks profits elsewhere.

A crowdsourcing platform that charges zero commission

According to Zhu, logo and visual identity designing are among the most popular services, counting for 30% of the platform’s total orders. Its major projects fall in three categories: graphic design, web construction, and marketing

Employers can publish a task in either a rewards system, where a best solution is chosen from all submissions, or in a bidding system, where a service provider is chosen for its qualifications and rate before the service is provided.

Similar to Witkey, where users share knowledge, share experience, and purchase services and information, Zhubajie used to have three major income sources: commission, ad revenue, and membership fees. Now, the picture has changed.

Last June, the company announced that it had landed RMB 2.6 billion (USD 399 million) in financing to build China’s largest online service e-commerce platform. It also announced that it would stop charging the 20% commission, amounting to millions of dollars per year. Revenue from ads and memberships only occupies a small proportion of Zhubajie’s total income, now that it has introduced a new business model.

A model that builds upon history data

The new business model aims to take advantage of the rich data that the platform has accumulated for almost a decade. With the data, Zhubajie now generates profits from services including trademark registration (Bajie intellectual property), financial advice (Baijie finance), house designing (Bajie projects), and printing (Bajie printing).

Zhubajie's new services (photo from Zhubajie)
Zhubajie’s new services (photo from Zhubajie)

“After accumulating resources such as users and data and exploring new possibilities for nine years, the whole new business model has formed its shape and is ready to take off,” said Zhu.

It’s worth mentioning that Zhubajie’s trademark registration services is not yet one year old but already receives 11,000 orders monthly. While offline trademark registration agencies in general have a pass rate of 40% to 46%, Zhubajie pushes that percentage to over 80%, thanks to its large pool of data and professional staff. The platform also promises zero charge for failed attempts at trademark registration.

A business incubator where skills are safely traded

In January, Zhubajie introduced its “Baijie City” program that helps enterprises and government organizations reach global services. The program will negotiate with 120 cities and cover 36 of them within this year, and the company will establish a VC fund to support local enterprises.

To build trust between customers and the platform, Zhubajie offers online services called “Fuwubao”, which guarantees that money is transferred effectively, and that compensation is available should a contract be breached. Additionally, a growth system of 32 levels scores service providers based on their total number of transactions, credit, and service quality.

“Our vision for Zhubajie is for it to become a most trusted crowd-sourcing service platform where knowledge and skills are shared,” said Zhu. “In that sense, Zhubajie is no longer merely a platform, but a business incubator that attracts service providers and employers from around the world, which in turn gains us rich data.”

The platform now has over 15 million users, among which 10 million are service providers and five million are domestic and overseas employers, creating revenue of RMB 7.5 billion in 2015.

(Top photo from Baidu Images)

Ke Jin

Ke graduated from the University of Edinburgh with a Master's Degree in English and has worked on projects with Ipsos MORI and SDI Media. She's particularly intrigued by China's thriving technology scene and is eager to write about this flourishing industry.

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