Baihe Case Analysis

Introduction
Heart, home, and harmony. These are the core values of Baihe.com (Baihe), a dating service
catering to Chinese consumers looking for marriage. Fueled by technological and socio-cultural
advances, the firm has steadily grown to become one of the largest dating services in China. The
firm has slowly gained the trust of customers and has expanded its service range greatly. To create
an overview of the firm, we have mapped out the business in the Platform Business Model Canvas
framework. Below is a brief overview of Baihe in the PBMC framework:

The Network: The core exchange on the platform is the facilitation of contact in exchange for time
spent on the platform. The two user segments are men and women looking for a spouse. The
network effects are strong: cross-side network effects are positive and same-side network effects are
negative. The Business Model: Baihe uses a premium-subscription revenue model in combination
with add-on services. Customers are attracted by effective online and offline marketing.
Furthermore, Baihe.com has actively joined partnerships to augment their value proposition of a
comprehensive dating solution. The primary resource needed to run and operate the platform is an
extensive IT-cloud-based infrastructure. The Institutional Setup: With a ‘follow the rules’ strategy,
proactive quality control across all four generic curation tools, and a multi-channel community
management strategy, Baihe’s Institutional setup is well handled and provides users with a safe
interaction across the platform.

Market offerings
Baihe provides an extensive market offering catering to their online-to-offline (O2O) business
model giving a thorough range of products and services. The company focuses on enabling an
end-to-end product that gives the consumer an easy package solution from match to marriage and
beyond. The services provided include reality tv and movies, matchmaking services, wedding
services, and finally marriage support and guidance.1 Furthermore, Baihe recently expanded into
multiple joint ventures to facilitate an easy transition from single to married life in a cohesive and
tailored way by creating one-stop Wedding Experience Halls and expanding on their upstream and
downstream supply chain.

Compared with competitors' product offerings, Baihe outperforms in terms of product complexity.
This is mainly achieved through the intelligent back-office solutions such as Baihe’s advanced
matching algorithm, which includes a more extensive range of data points. Additionally, Baihe
delivers security measures unmet by any other market players. Through its data validation the users
can feel safe when adding new information to their user profiles. With the right infrastructure,
Baihe’s digital product offerings include features such as “Love Search Direct” and “Mind
Matching” which improves the probability for successful matching. Where competitors to a greater
extent focus on volume matching, Baihe’s premium features are more precise in the matching, and
later engagement of users. In conclusion, Baihe’s broad product portfolio of services is designed to
maximize customer satisfaction - something that is met through the extensive O2O business model.

Technological factors
Several technological factors have led to the rise and growth of the online dating industry, which
have in turn helped to propel Baihe to the forefront. These technological factors can be separated
into two primary categories: the rapid digitalization of China and the widespread impacts of
COVID-19. Firstly, China’s increased modernization over the past few years has been largely fueled
by vast digitalization across all sectors. This shift has been marked by several key statistics within
the Chinese population. From 2017 to 2019: Chinese dating application downloads have increased
by 40%, 41% of women and 30% of men switched from offline to online dating, the online dating
market has grown by over 700 million yuan, and mobile internet users have increased by over 95
1
Baihe.com (2019)
million. In addition to rapid digitalization, the pandemic has also catalyzed the online dating
industry exponentially. Due to COVID-19, a significant portion of individuals shifted from offline
to online dating activities. To curb the dangerous effects of the virus, in-person gatherings were
severely limited which made it difficult for singles to form connections in physical spaces. Online
dating provided an effective and accessible solution to this issue, which led to its massive expansion
during the pandemic.

Socio-cultural factors
In traditional Chinese culture, getting married and having offspring is the most important
responsibility of sons, since Chinese people see marriages as means to unite two families,
commemorate ancestors and carry on the family name. Unmarried men are considered unfilial
under Chinese culture and would naturally be urged to find a partner by their families and society.
However, in China, due to the traditional value of male dominance, the gender ratio has long been
significantly inclined towards the male side, with the peak gender ratio of 118.6 male births per 100
female births in 2005. After the relaxation of the one-child policy the gender ratio has become less
imbalanced gradually, yet, the gender ratio is still high, with the ratio being 113.5 in 2015.2 This
demography depicts the situation that Chinese people who are still single at marriageable age face
huge pressure and competition to get married.

We have concluded three main factors that lead to the thriving online dating industry - namely
growing need for marriages, the growing economic power of the young generation and the shift in
marriage values. Firstly, in 2018, China had a single population of 240 million people, which is
26% of the 15 years old or above population.3 Besides, the number of divorce couples has grown
over 6.5 times since 1987, with 4.2 million divorce cases in 2019, equivalent to half of the number
of newly married couples in the same year.4 Many people have to get married and online dating
provides a convenient and effective way for them to find suitable partners.

Secondly, 49% of the Chinese population are falling into the upper aspirant and above category in
2018, which is a 40% growth compared to 8% in 2010, showing that Chinese people are becoming
more economically powerful, making online dating services more affordable to more Chinese
citizens. Research has also shown that on average, young people are willing to spend RMB¥1495
monthly on dating.5

Thirdly, the rise in individualism in China has led to a change in the marriage values of the younger
generation. In the past, marriages were often arranged by parents and more focused on the purpose
of passing on family names and fulfilling expectations from families and society, while nowadays,
more people believe that marriages are about life-long relationships and should be decided by
oneself. Young people would like to find their ideal partners by taking into account the social
mobility, physical and mental compatibility and family background, which can be all accessed
through the data driven matching features and the large candidate pool, giving people more
motivation to try out online dating services.

Trust
Trust is vital on online dating platforms as the lack of face-to-face interaction can spur distrust,6
while trust in online information is paramount in the search for a future life partner. The importance
of trust is further amplified by the business environment, characterized by a degree of buyer
mistrust,7 a high level of in-group trust (quanxi) and a low level of generalized trust.8

3
UNICEF (2017)
4
Leung (2020)
5
People’s Daily (2018)
6
Southern Metropolis Daily (2020)
7 Liu, Dixon, and Murphy (2002)

8
Wunderman Thompson Commerce
Yao, J., Zhang Z., Brett, J. and Murnighan, J. (2017)
Despite widespread online dating scams in China,9 Baihe has built a competitive advantage in trust,
setting themselves apart from competitors. This strength derives from their distinctive resources: 1)
Brand value, 2) Strong customer relationships and distinctive competencies; 3) Verification and 4)
Data Security. The brand value is supported by a proven track-record of marriages and through a
strong media presence in the reality-show “If You Are The One”. Secondly, trust is enforced
through the offline-online channel strategy, building strong customer relationships and meeting
customer needs of familiarity. Furthermore, the engaging online and offline community reduces
alienation and distrust, difficult for online-only competitors to compete with. Thirdly, Baihe
differentiates itself from competitors through a comprehensive verification system: Registering
users with their personal ID, promoting credit scores and encouraging users to upload proof of asset
ownership. This is a unique value proposition of Baihe. In comparison, key competitors Tantan and
Momo verify users with respectively facial recognition, ID’s and phone numbers. Lastly, Baihe’s
digital infrastructure has safeguarded customer data, setting them apart from competitors like
Tantan, who previously did not encrypt sensitive customer data10, and Zao, owned by competitor
Momo, who was criticized for data breaches. Baihe thus outcompetes rivals, reaching customers’
critical success factor of data security.

To understand the level of trust and value in Baihe users’ eyes, we examined their customer
satisfaction. We measured customer satisfaction in regards to the creation of relationships and the
resolution of issues that arise in relationships. We analyzed customer satisfaction in two ways:
qualitatively through written reviews/feedback and quantitatively using available statistics.
Qualitatively, we observed that customers appreciated the degree of user-friendliness,
trustworthiness, and supportive community. However, these positive statements were matched by
negative reviews stating the platform has a complex profile creation process and caused user
insecurity because of the level of information disclosed. Quantitatively, the company sports an
average of 3.9 out of 5 stars across application download platforms, a growing user base of 120
million users, and a 18% conversion rate on the creation of relationships. The creation of
relationships figure is paramount because other competitors have a conversion rate of <10%. Our
analysis revealed several areas of improvement which motivated three recommendations to improve
Baihe’s customer satisfaction.

Recommendations
Drawing on insights from our extensive research, we have developed several key recommendations
to increase overall customer satisfaction and trust. In regards to customer satisfaction, we
recommend: 1) Create an inclusive languages feature in which the application is translated to
English to attract and satiate the increasing expat population within China. 2) Enhance data
transparency so that users can select from a variety of options on the amount and forms of data to
upload. 3) Expand on existing livestream auctioning services to include the bundling of all Baihe
services. These three recommendations lead into our next two which regard trust, the backbone of
customer satisfaction. In regards to trust, we recommend: 1) Use continuous customer feedback to
develop new target segments within the overall Baihe and online dating user base. This could
include a non-data driven segment which would attract those who would prefer to not upload
personal information such as income and education. 2) Emphasize data security and consumer
protection to both strengthen Baihe’s brand image as well as prevent future data scandals.

Conclusion
To conclude on our project, we have found that Baihe continues to differentiate itself from
competitors by offering a more serious and complex O2O product offering than any other players in
the market. In addition, the company has earned the trust of consumers through a reliable algorithm
and proven track record of successful matches.

9
Chen (2017)
10
Cox (2015)
 Baihe Case References / Sources
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