Monetization still a problem

Dianping's first try on monetization was a physical membership card, but it didn't work out. For years promo coupons and advertising were the revenue sources with which Dianping managed to turn a profit in 2008. While revenues back then were good enough for a small business, it is another story when scale-up began.

In June 2010 Dianping Group-buy was launched as one of a wave of group-buying services in China. But Dianping saw it a good match, as a monetization approach. But so far the business hasn't generated a profit for Dianping for the margin is too low. It is estimated that group-buying services in China make an average of 3% -5% in gross margin -- it's 7% in Meituan's case, as its co-founder disclosed at the ChinaBang 2013 early this year.

Other revenue streams, similar to those before 2008, include e-coupons and search advertising.

Can Dianping grow to become a $10 billion company within five years? Dianping is so far the largest platform in terms of data about merchants -- but some players like group-buying service Meituan are catching up.

Dianping decided to open up data to third-party developers so that it could become a powerful platform. It takes another six months for the company to release some useful APIs. Now third-party apps can show ratings, reviews and other information about a merchant from Dianping on their services. Apps who channel users to Dianping's group-buying service can take transaction-based revenue shares.