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Watchdata wristband swipe pays for subways, buses

By Du Juan (China Daily) Updated: 2016-08-24 07:18

Editor's Note: In this ongoing series on the birth and growth of privately owned Chinese companies that are redefining innovation, China Daily profiles Watchdata Technologies Ltd, a Beijing-based payment security solution provider that is shifting its focus from selling to large State-owned enterprises to consumer markets.

Facing numerous copycats and shrinking markets, Watchdata Technologies Ltd, a Beijing-based payment security solution provider, had no choice but to explore the consumer market.

Established in 1994, the company has focused on payment and trading safety, including chip cards and smart cards for banks, public transportation companies and mobile communication service providers.

"Our clients used to be State-owned enterprises such as China Mobile Ltd and China Construction Bank Corp," said Ye Xin, general manager of the company. "However, the growth of those sectors has not been satisfactory in recent years. Thus, we developed the Watchdata wristband, which is our first product that directly appeals to the consumers."

Watchdata wristband has one key important function lacking in such popular wristbands as the Chinese brand Mi Band and the American brand Jawbone - that is, it can be used to pay for public transportation.

"In addition to recording sports, sleep and health data for users, we added the payment function to the wristband, building on the technology strength of our company," Ye said.

Li Jian, a Beijinger who has used many wristbands, said he can never wear one more than three months. "It seems like a spell that I just cannot keep wearing any wristband longer than that because of laziness or just that it is inconvenient."

However, if Li has to take a subway or bus to go to work, the Watchdata wristband will be like his public transportation card, which he will need everyday.

Nevertheless, the Watchdata wristband faces severe competition from various kinds of smart wristbands and its performance in the market remains to be seen.

Wang Youjun, president of Watchdata, said it's not easy for a private company to be successful or even survive in the current market.

"Our big clients such as China Mobile and some banks have reduced their orders for sim cards and chip cards. They became more cautious about market expansion or product promotion," he said.

According to Wang, the company's orders for sim cards declined by 20 percent last year and orders from the banks were falling too.

"Given such a background, we have to adjust our strategy by expanding our market from B2B (business-to-business) to B2C (business-to-consumer), trying to earn more cash for the company," he said.

At the same time, keeping up innovation is the key, Wang said. "You can never stop the imitators from learning from your products. We have to keep developing new things."

Up to 8 percent of the company's annual investment goes to research and development, which is around 130 million yuan ($20 million) to 140 million yuan.

Half of the employees in the company are technicians and engineers.

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