I was in China for my graduation trip when I saw this particular machine dispensing deals via coupons on food/clothes/products etc. It has taken off in China but somehow no one has brought it into Singapore yet. Personally I find the idea very lucrative as I did a mini business plan with a few friends including asking around for potential investors. However I regret to say that nothing has been done as everyone that I talked too would like to concentrate on their jobs.
Nonetheless, here is the idea that I would like to share and maybe someone will actually do it? All the best to the person!
Sample picture of the machines (from english.sina.com)
- Build a machine that dispenses vouchers from merchants in the proximity to passersby, so that they will be enticed to visit these shops.
- Charged the merchants for advertising on your machine
- Over time, create a profile list of the users of these machines and more revenue can be gained for being able to target specific groups of people
Why I think it will work
- At least for people my age group, we tend to meet at a certain MRT station first before actually deciding what to eat. Because some people in a group will definitely be earlier than the rest, he can go take a look at the machine and decide what's having a promotion and propose to the group.
- Singaporeans are price conscious
- Putting these machines at MRTs is essentially targeting the middle/lower class people who will be more likely to be price conscious
- Even if people do not use the vouchers, by having people looking at the machine and the respective merchants on it, advertising is essentially done already
- It has been proven that coupons dispensed on these machines have a higher conversion rate as to those given by via pamphlets. (source from the China company)
- 1 x MRT panel in City hall per month is approx SGD400
- 15 merchants per machine, each paying SGD500/mth (Presently in China, some merchants pay up to SGD800) = SGD7,500
So as in you can see, even with other costs, the potential returns are huge! If you put it at the major heartland malls where aunties/students are..it should be a hit!
- Low barrier of entry. Essentially a big company like JCDecaux can just come in and build a similar machine beside yours and outlast you as they have more capital. Hence I propose teaming up with another big player in order to allow the company to be sustainable in the long term.
- Looking for merchants to partner up with will be a problem. But I propose that we can team up with 'The passion card'. Personally I do not think their card is as widely used as expected (I might be wrong), but essentially partnering with them would give a greater backing and also a list of their existing client. This is also good for them, as it will help promote the use of their card. (The china company actually issues membership card that can be used with the machine. Passion card can be promoted via this means too)
Here is the link to an online article too. Click here
Feel free to comment/email me to exchange ideas and views.