(Chinese Version)

Commercialization seems to have always been a common obstacle for tool apps that’s hard to tackle. In general, tool app users would only open the app when they need to achieve something. And when they are done they will just close the app. Such user behavior results in the difficult of cashing in even though these tool apps boast millions of users.

Meitu, listed a month ago, was once plagued by such issue as well. This time, MoWeather has also become a center of attention.

In late December last year, MoWeather filed its prospectus to CSRC(China Securities Regulatory Commission) and is planning to go public on the Second-board Market. The maximum pplacement is ￥338 million. What really draws attention to this company is its revenue sources. According to the prospectus, by the first half of 2016, the advertising business accounted for 98.7% of MoWeather’s income, while smart hardware took up only 1.13%. It’s worth noticing that the top five clients of the advertising business contributed 79.5% of the advertising revenue.

MoWeather’s founder Jin Li stated that MoWeather has amassed 500 million users to date, accounting for 55% of the market share, which is 390% more than the second leader. But the company is still trying to find a way towards commercialization, he added.

Breaking the limitation of tool apps

Tool apps’ business model is usually based on the advertising business. The biggest problem for tool apps is that users don’t stay in the app for long. They open it, they achieve something, then close it. This also holds back the advertising potential of the apps. In this case, keeping the users in the app for a longer period is the first challenge tool apps need to think solve. MoWeather is no exception.

But for MoWeather, part of the pressure also comes from the fact that smartphones nowadays already have pre-installed weather apps that also provide quality service while most of the users only want a simple app.

That said, MoWeather has to offer more valuable information to the users. Jin Li told TMTPost that in the past year MoWeather has been making improvements involving data. MoWeather has previously established cooperation with the State Meteorological Administration and has now set up its own Meteorology Research Center. Covering the weather information of over 70 countries around the world, it also provides detailed and precise weather forecast that updates every minute and within the one-kilometer range.

Aside from that, MoWeather has added a virtual avatar that changes clothes according to the weather, and a real-time photo community. Users can look up the photos posted by other users on the community and determine the actual weather condition outdoors. Jin Li said that the real-time photo feature received great feedbacks after the launch and now the company is considering to add short video and live stream functions to the app so as to provide more visual information.

These are efforts based on tool app’s properties that aim to enhance services centering weather. In April 2016, MoWeather launched Weather+Service on the app. Tap open MoWeather you will find the My session. It’s apparent that MoWeather has integrated cab-hailing, takeout and car wash services.

MoWeather’s senior market director Jin Qu told TMTPost that Weather+’s logic is that satisfying different demands under different weather scenes. For instance, MoWeather notifies you that it’s going to rain in one hour, then you will need to hail a cab right away or order a takeout accordingly.

Thought leaders on TMTPost once released articles expressing that the best options for tool apps to transform is going for community, service, and content. MoWeather has literally tried all these methods to get rid of the tool label and increase user retention rate. On MoWeather, you can see photo community and services you see on WeChat. There are even news feeds about weather and health, and an e-commerce shop.

According to MoWeather’s prospectus, the average user in-app time is 2mins 17seconds.

But how to balance user experience and commercialization?

Of course, all the efforts are made to provide better service for the users, as well as expanding business channels for the products.

After rolling out a series of services and smart hardware Kongqiguo, advertising is still the main revenue source of MoWeather. MoWeather’s senior vice president Cheng Qian told TMTPost that MoWeather’s main cash-in source is brand+data flow, and in the future it will become more of data digging+data value, which is data+data flow+brand value. In conclusion, the revenue we are talking about here is from advertising.

The prospectus shows MoWeather mainly provides brand advertising and other advertisement services for businesses, including banner, app intro, feeds and the outfit assistant recommendation. Other advertisements include links to Taobao, JD and 58.com etc.

Cheng Qian stated that MoWeather will make a data set combining user data and the data flow based on the data accumulation on the users, in hopes of increasing the conversion rate of the advertisements. In addition to that, MoWeather will recommend relevant content and advertisment to the users based on the data. However, Cheng Qian revealed to TMTPost that at present MoWeather mainly adopts data from third parties and hasn’t integrated its own DMP yet.

“We started to undergo commercialization in the second half of 2015 and there is still a long way to go,” Cheng said to TMTPost. On advertisement commercialization, Jin Li stated that MoWeather’s future goal is to commercialize its app product. “For instance, when a user is reading the weather forecast and needs some relevant services, the app will provide him with the information. We will make a closed-loop sales and increase the cash in rate,” he explained.

However, if you have checked out MoWeather’s app before, you might probably find that the boundary-breaking moves and the detailed advertisements have made the UI more complicated. Some of the functions are even useless to some users.

“We are making a 7.0 update in which we are trying to enhance the business logic in the current product. We want to make it easier and more logical for users to use,” Jin Qu explained. “We noticed some users’ new demand and we are trying to integrate them in our app, that’s why our content is becoming more complicated. This is an experiment process, which brings out quite a raw image. We are hoping to continue the experiment without bothering the users in the future.”

“We have been working very hard on this. And there is pressure from commercialization,” Cheng Qian said.

Hardware will still be part of the main business, but To B will be a new direction for profiting

Hardware is a new fruit from MoWeather’s commercialization efforts. Kongqiguo is a product mainly used for air quality assessment and MoWeather has already launched the second generation which is still priced at ￥999 but with formaldehyde detection function added. Additionally, Kongqiguo Sport is even cheaper and popular, priced at ￥299.

Jin Li and his team expressed that MoWeather will continue on its hardware business and there are possibilities that the company will launch air purifiers as well. An insider familiar with the matter revealed to TMTPost that compared with Xiaomi who has stronger advantage in supply chain, MoWeather might face higher cost making hardware. The previous two generations of Kongqiguo are not cheap in fact.

According to prospectus, MoWeather’s hardware sales had been $1.2102 million in the first half of 2016. That’s not a satisfying figure. Even so, Kongqiguo’s influence doesn’t show on the To-C sector.

According to MoWeather’s technology vice president Bao Yueqian, Kongqiguo is equipped with high-tech sensors. These sensors can monitor air quality and send the collected data to the cloud, which makes it easier for MoWeather to utilize big data technology and AI technology to make real-time analysis of the scene. Based on that, MoWeather can adjust the weather forecast sent to the users.

These data’s value might only reflect on the To-C app, but Jin Li told TMTPost that MoWeather is going to explore the To-B sector to go deeper into the weather forecast and commercialize data.

“Our To-B business is based on MoWeather’s cooperation with some enterprises. We make analysis for them and outline the negative effects the weather might have on their businesses,” Bao Yueqian told TMTPost. MoWeather’s data on the weather can provide better and more accurate weather forecast for enterprises and help them make decisions.

Bao also stated that currently MoWeather has reached a cooperation with Coca Cola for the To B business. With MoWeather’s data on weather forecast, Coca Cola can better adjust its production and logistics.

In some foreign countries, such adaptation is not a new thing. Statistics show that in UK and the U.S, every year the volume affected is around $160 billion, while the number in Europe is $260 billion and $10 billion in Japan. IBM even acquired weather forecast company Weather Channel at $2 billion.

From this perspective, it seems the data business is more valuable and has more potential than the advertising business. This requires private companies to have very high weather data analysis capacity. Once the company reaches a certain state, whether it’s 2C or 2B, or even To Government will become possible.

On this decision, Jin Li even cross referenced the data from similar overseas platforms. “The 2B and 2C business take up like half half for mature weather companies,” he told TMTPost.

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[The article is published and edited with authorization from the author @Han Pei, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.