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微差事 Charles Pei August, 2013.

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1 微差事 Charles Pei August, 2013

2 Privileged and Confidential
Executive Summary Business Model Wei Chai Shi or 微差事 is a mobile marketplace that instantly connects companies that have mass fieldwork with people who are willing to do it, anytime, anywhere. 微差事 is the Chinese word for “MicroTask”. The types of fieldwork ranges from spot checks, retail audits, surveys, paid advertisements and trials, location- specific promotions. Brands create followers while lowering operations and marketing cost. Thousands of smart-phone enabled people can complete simple tasks on their commute to work, while they are shopping at the grocery store, or simply walking around. It’s EASY, it’s FUN, and IT PAYS! About the Company 微差事 is owned by YIYU Technology Co., Ltd. The Company develops SoLoMo marketing solutions to connect consumers, distributors and brands more efficiently. The Company’s vision is to develop interactive and experiential marketing tools leveraging new technology to replace traditional marketing. The management team come from Fortune 500 High-tech, FMCG and top consulting companies, with deep expertise in product development, sales and marketing, and consumer industries. Combining high-tech solutions with retail marketing experiences, along with imbedded relationships with top brands, the Company is well positioned to provide innovative mobile marketing services in China’s burgeoning consumer market. Investment Proposal The Company seeks first-round venture funding of $2MM($20MM valuation), to be invested in R&D, marketing and business development. Top brands, market research companies, advertising agencies have shown strong interest in trial run, we need to reach sufficient scale within a relatively short period of time to build/defend first- move advantage. Privileged and Confidential

3 Privileged and Confidential
Recent Developments · Fast Facts Weichaishi covered 400+ cities nationwide Plan to increase to 1,000,000 users till the end of 2013 · IT Media reports · Shanghai TV Station –News Report 搜狐IT 雷锋网 Privileged and Confidential

4 Executive Summary – Business Model
Through crowd-sourcing and crowd-marketing, we connect companies with end-users at low cost, leveraging mobile platform for sourcing fieldwork and promoting brand to a distributed “crowd” Information Flow Monetary Flow Brands / Distributors Crowd Sourcing Crowd sourcing is originally a technology term that involves “outsourcing” tasks to a distributed group of people through an “open-call” MicroTask is a mobile platform using crowd sourcing concept to connect companies with a distributed group of consumers, where small tasks are broadcast to and completed by the “crowd”, lowering execution cost Crowd Marketing Such “mobile workforce” can also become active brand followers through completing brand-sponsored tasks, collaborative/viral marketing activities MicroTask platform is a new way of connecting companies with targeted consumer groups. The idea is simple: make each user a potential marketer and an active brand ambassador. Benefits to companies Get timely and precise data with wide coverage and low cost Connect with consumers directly Create or expand brand followers Example: spot check, retail audit, trial promotion Consulting/Research Firms Benefits to consumers Make extra money in spare time Obtain free samples (or discounts) as early adopters or trial users Establish social contact through like-minded consumer groups Example: survey form in support of research data Advertising/Media Agencies Example: interactive marketing, advertising

5 Privileged and Confidential
Business Model – Corporate Segments Brands and distributors Research/consulting companies Advertising Agencies Example: spot check, retail audit, trial promotion Example: fill in survey form in support of research data Example: view advertisement and key marketing messages Value for Brands Value for Research Companies Value for Advertising Agencies Recruit mass consumers complete simple tasks Lower operations cost (e.g., retail audits, spot checks) Create brand followers Drive product trial and promotion Recruit smart phone users to complete real-time survey Reduce data collection cost Broaden geographic coverage Improve targeting through task screening and selection (Phase II) Deliver omnipresent marketing Ensure accurate delivery of key messages and selling points Track true “impressions” Improve targeting through tailored marketing (Phase II) Crowdsourcing - Mobile marketplace connecting fieldwork needs of companies with consumers who are willing to take small tasks on the fly Privileged and Confidential

6 Target screening based on task tracking and feedback loop
Business Model – Consumer Segments Phase I – Self-selection of tasks by consumers, targeting tasks with mass appeal to build a large base Brands Consulting/Research Companies Advertising Agencies Self-selection of tasks Self-selection of tasks Self-selection of tasks Target screening based on task tracking and feedback loop Phase II - Personalized task list to targeted groups, level of targeting is driven by nature of the task Large base of “mobile” workforce who are willing to take small tasks for easy money, fun, or good cause Smart phone users who have certain demographic characteristics and meet minimum income threshold Early adopters who are open to new products/services, and good candidates for research and survey Large consumer database with demographic and behavior data for targeted marketing and research Privileged and Confidential

7 Experiential Marketing Interactive Advertisement
Multiple Areas of Application Marketing Department Sales Department 1 Sales Execution Advertising/POP check (户外广告展示质量, 出现频率, 受众反馈) Outlet Sales Execution (产品展示, 产品价格, 促销情况, 竞争产品) 2 Experiential Marketing Collect feedback through experiential marketing (如产品或服务体验) New Product Launch through experiential marketing (如试装,试饮, 试驾等) 3 Interactive Advertisement Two-way interactive Advertisement (目标用户群体浏览产品或品牌广告,通过回答问题, 好友分享等方式传播产品、品牌) 4 Consumer Prospecting Marketing event invitation, member-get-member (参加市场活动, 成为会员, 推荐客户等) Crowd-sourcing for sales promotion and sales activities (参加促销活动,成为会员, 推荐客户等) 5 Market Research Consumer Behavior Survey (招募目标客户群体, 开展调研活动) After-sales Survey (针对目标客户群体, 开展调研活动) Privileged and Confidential

8 Brands – Sales Execution
Traditional sales execution needs dedicated team, WCS allows consumers to complete tasks with lower cost 传统销售执行检查需要外包或专业团队,“微差事”通过众包让消费者就近完成检查,降低成本同时宣传品牌。 Before After Recruit dedicated team with special training, a lot of time is wasted in reaching the destinations Assign to WCS users who are near destinations to complete tasks at lower cost, while promoting brand Privileged and Confidential

9 Brands – Experiential Marketing
Brand needs people to try new products with feedback, WCS allows consumers to complete tasks with promotion 品牌或商户需要客户体验新品并提供反馈, “微差事”通过众包让消费者就近尝试新品,降低成本同时宣传品牌。 Before After Buy a new product Snap picture of receipt Use Redeem a new product for free with QR code Use call center to invite consumers, distribute new products at different locations with high logistics cost Assign to WCS users who are interested and motivated to try new products and provide feedback Privileged and Confidential

10 Market Research and Survey
2 Market Research and Survey Traditional survey companies need to pay high cost for panel, WCS users can complete simple surveys at lower cost 传统市场调研需要招募合适的调研对象,用“微差事”招募愿意被调查的目标客户群体,降低成本同时宣传品牌。 Before After Recruit candidates to survey “panel”, high cost of face-to-face interview and written survey Assign surveys to WCS users who meet “panel” criteria, complete survey with mobile phone anywhere Privileged and Confidential

11 Privileged and Confidential
3 New Advertising Format Traditional advertising only tracks “impressions”, WCS ensures delivery of key messages with more effective targeting 传统广告受众群体广泛, 缺乏有效性和针对性。 “微广告”让消费者浏览并熟悉广告内容,增强互动性和互动性。 Before After View advertisement Answer 1 question Audience Screening Passive Advertising: OOH, TV, newspaper, bus/subway body wrap, LED screens, online banners Interactive Advertising: qualified WCS users watch ads, provide feedback, with cash or coupon rewards Privileged and Confidential

12 Consumer Profile and Experience
Smart phone users can complete simple tasks in nearby locations during their spare time, it’s fun, easy, and it pays 成千上万的职能手机用户可以利用零碎时间完成附近的“微差事”,操作简单、多重收获、乐此不彼 Step 1: Register with basic demographic data capture Step 2: Choose tasks based on type, location, and various rewards Step 3: Obtain personalized task list based on preferences/record When users complete tasks with high quality, more tasks with higher value will open up Phase I Profile Skew towards young population (age 18-35), with rich retail experience, early adopters, open-minded Phase II Profile Develop balanced profile (age 18-50) with special registration drive (e.g., charity, high-end lucky draw) Privileged and Confidential

13 Privileged and Confidential
Market Opportunity Sizing Summary of Market Opportunity China digital ad spend is growing faster than traditional media, representing the most significant market in Asia Mobile marketing spend will reach $0.8Bn in 2012, and is projected to grow around 30% per annum China market research industry has reached $12.3Bn revenue in 2010, growing at 10%-12% per annum Sales check market is close to $100MM in China Size and growth of these markets creates a very significant opportunity to “crowd sourcing” & “crow marketing” business China Market Research (USD billion) 2004 2006 2008 2010 Source: eMarketer Privileged and Confidential

14 Privileged and Confidential
New Marketing Paradigm 传统营销 (Traditional Marketing) 互动营销 (Interactive Marketing) 通过完成一项简单任务,实 现传统营销中的多个步骤 Achieve multiple steps of traditional marketing, by completing one simple task - 广告 (advertising) - 宣传 (promotion) - 邀约 (trial invitation) - 转化 (conversion) 瞭解 Awareness 1. 广告 Advertising 瞭解 Awareness 考虑 Consideration 2. 宣传 Promotion 考虑 Consideration 尝试 Trial 3. 邀约 Trial invitation 尝试 Trial 购买 Purchase 4. 转化 Conversion 购买 Purchase 传统营销:受众群体广泛,缺乏针对性和可测性, 在广告、宣传、邀约、转化的过程中损失率过高 Multiple steps in mass marketing, ineffective targeting and tracking, with high drop-off rate 互动营销: 整合传统营销中的多个步骤,定向受众 群体(接受相关任务),提高针对性和转化率 End-to-end marketing from awareness to conversion, with better targeting and tracking Privileged and Confidential

15 Privileged and Confidential
Competitive Analysis Competitive Assessment Competitive Advantages Large Incumbents Industry heavyweights, with diversified business portfolio and new ventures Market opportunity likely too small for them (to invest significant resources) More likely to buy existing platform First-mover advantage to launch a brand new business model Ability to continuously innovate and extend crowd-sourcing and crowd- marketing business model Niche player with sharp focus Technology-driven database mining, user rating, dynamic task matching Early tie-ups and entrenched relationships with key brands (e.g., Coca-cola, Nestle, Nielson) Experienced management team, combining high-tech background with retail marketing experience Local connections and execution capabilities, as well as investor- friendly overseas background Social Network Sites Niche players with different business model ( C2C projects) 积分墙-model unlikely to push into this area due to lack of sophistiticed platform and synergy with existing business model More likely future business partner U.S. Players Established in 2011, VC funded “Mobile workforce” business model (Gigwalk focuses on C2C, Easyshift with slightly more focus on B2) SurveyMonkey focused on online survey Small team, no overseas ambition Privileged and Confidential

16 Privileged and Confidential
Management Team Charles Pei, CEO and Co-founder Charles is responsible for company’s vision, strategy and infrastructure development. Before co-founding YIYU, Charles also served as CTO at Scientific Games China. Prior to that, Charles spent 12 years with Oracle in the U.S. and China, holding a number of senior positions in product development, enterprise consulting, and business development. Charles holds a Bachelor’s Degree in Computer Science from Nanjing University, a Master’s Degree in Computer Science from New York University and an MBA from Columbia University. Cindy Bu, President and Co-founder Cindy oversees daily operations, as well as sales and channel management. Before co-founding YIYU with Charles, Cindy was the Regional Sales Head of Scientific Games China, overseeing annul sales of over RMB 2 Billion. Prior to that, Cindy held a number of management roles in Sales, Marketing and Operations of Coca-cola China for 10 years. Cindy received her Bachelor’s Degree in English from Shanghai International Studies University. Privileged and Confidential

17 Privileged and Confidential
Our Partner & Client Privileged and Confidential

18 Privileged and Confidential
Company SWOT Strengths New and innovative business model Ability to scale up quickly with light infrastructure Diversified revenue sources Experienced management team, combining high-tech background with retail marketing experience Early tie-ups with key brands (e.g., Coca-cola, Nestle, Nielson, IPSOS,BMW, Metlife etc.) Synergy with broad mCommerce platform Weaknesses Unknown brand Limited marketing budget to overcome initial hurdle to reach user registration scale Limited operations support to maintain large user base (e.g., enquires, task allocation) *above issues can be mitigated with initial investment Opportunities Pervasive use of 3G Mobile Internet in China Target market growing quickly, including branding and marketing, FMCG sales execution, market research and surveys Companies move away from transition marketing to digital and social marketing Traditional sales execution and market research very costly in China due to geographic dispersion Threats Business model can be replicated; although market has sufficient room for multiple players Large players (if they decide to compete) have higher R&D budget to perfect this model and large customer base to quickly capture the market* Difficult to negotiate exclusive tie-ups *future investments will be sought to support R&D Privileged and Confidential

19 Appendix

20 50+% Cost Reduction through Mobile-Based Crowd Sourcing
Cost Effectiveness Survey target selection Survey distribution Data Collection Quality review Data analysis and report Survey design Invitation/panel selection cost Recruitment and management fee Survey form printing and distribution, participant fee Data collection, transmission and key-in Labor cost Data review and quality control cost “Defect” cost 50+% Cost Reduction through Mobile-Based Crowd Sourcing Survey tasks are assigned to a distributed group of respondents Automatic data capture through WCS Mobile App through QR or image processing Real-time data review to ensure quality control and lower defects A large and scalable panel can be maintained at low cost, leveraging WCS platform that consolidates users from multiple applications (e.g., brands promotion, experiential marketing, sales execution, customer prospecting and event invitation) Privileged and Confidential

21 Research Panel WCS platform consolidates users from multiple sources, and engage them continuously with different tasks “微差事”平台提供不同种类的众包任务,以此建立活动率较高的群体,并可根据行为特征提高调研群体的针对性 Panel Targeting (assign surveys to targeted group of potential respondents) Panel Tracking (tag behavior from task selection and completion quality) Sales Execution Brand Promotion Experiential Marketing Research and Survey Panel Maintenance (engaged through multiple sources of ongoing activities) Privileged and Confidential

22 Privileged and Confidential
Product Screenshots Privileged and Confidential

23 Sales Execution 1 During the Chinese New Year, Nestle introduced “product display inspection” tasks in 1734 stores in 71 cities nationwide According to different situations, the brand listed the display of products needed to be checked as different tasks, users collect the information of the store and take photos and check the display of the items, to ensure the upload information is true and valid During the Spring Festival, a total of 3,520 users participated and completed 81% of the target task list

24 Interactive Advertisement
2 A cosmetics brand used WCS to interact with the consumers, promoting and publicizing their new product. Consumers view the brand advertisement and receive a tryout. After experience the tryout, consumer upload the feelings to the major social platforms, resulting in further transmission. During the task, 10,280 tryouts were send out.

25 Experiential Marketing
3 The Nestle Milk Power uses the WCS to carry out precision marketing and target customers, and offer concessions to their target consumers. Consumers in the mall watch a video about the product and then answer the questions related to the video content. A free product sample will be given to consumers for their correct answers. During the task, 5,200 tryouts were send out.

26 Consumer Prospecting 4 A large research agency commissioned WCS to invite target customers to complete work as a mystery shopper. (in 四五线城市) The consumers upload the personal particulars and information which need to be known by WCS, those who meet the requirements will be directly hired and receive remuneration. Through the five-day cooperation, the agency recruited a total of 37 mystery shoppers who meet the requirements.

27 Market Research 5 WCS conducts research about the basic user information by publishing a survey questionnaire According to content of the questionnaire, the users give the corresponding answers. Until now, We have collect nearly 28,300 valid questionnaires.

28 Market Research 5 A well-known research agency commissioned WCS to gather the information of those commercially available products in the specified directory During the process, consumers use their mobile phones to take the photos of the barcode and products from front/back/over at different shopping malls in multiple cities, to get complete information. 88 users from 21 provinces completed the data gathering of 112 products.

29 Market Research 5 With WCS, Nielsen collected newly opened store information in 3rd or 4th tier cities in rural area. Consumers find the qualified shops, then use the mobile phones to gather and upload relevant information. following the prompted steps. Within a week, a total of 17 valid samples were collected.

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