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Technology capitalizes on convenience, high-traffic areas
SHANGHAI - Don't waste time clipping discount coupons from the community newspapers or flipping through the mail to find them.
On-demand discount coupons are here in Shanghai.
A Velo vending machine dispenses coupons to a woman at a subway station in Shanghai. Velo has more than 1,300 discount coupon vending machines in selected subway stations, shopping malls and supermarkets in Shanghai. [GAO ERQIANG / CHINA DAILY]
The idea of dispensing discount coupons at vending machines in busy subway stations dawned on 39-year-old Zhang Yibin one day when he was standing in line at a McDonald's restaurant in downtown Shanghai.
Zhang, who has a PhD degree in computer science from East China Normal University, saw many customers buying lunch at a discount with coupons. He found it slightly unfair to customers like him.
To address the issue, he dreamt up a new business that borrows on radio-frequency identification (RFID) technology.
RFID is the use of an object or RFID tag applied to or incorporated into a product, for the purpose of identification and tracking using radio waves.
Zhang used the technology beginning in 2006 by issuing cards the size of a matchbox, though much thinner, to clients to retrieve discount coupons from proprietary vending machines in certain subway stations.
After a slow start, the Velo card business has taken off since the end of 2008.
Weng attributed the company's growth to the decline in the Shanghai stock market after the outbreak of the global credit crisis. "There was an avalanche of requests for our cards in late 2008 when the leading stock indicator nose dived to below 2,000 points from over 6,000," he recalled. "I suppose people have become more price conscious in hard times," he said.
As Weng recalls the business reached its turning point when the number of cards issued passed the 400,000 mark in late 2008, and major fast-food chains such as McDonald's and KFC, began to take notice. So far, the company has issued in excess of 3.5 million cards. They are particularly popular among young people in Shanghai, said Weng.