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Next-generation China: Taking a look ahead into the future of a giant market

The spreading ”nage-sen” (tipping) culture in China: Will trust relationships between individuals bring about change in society?

March 28, 2019

System for directly rewarding an individual

The ”dashang” (reward) system, in which private individuals directly pay money for contents that they like on websites or apps, is increasingly becoming widespread in China. The same system can be found in Japan, where users can give ”nage-sen” or ”ohineri” (tip or reward) to performances and similar online contents. In China, however, this system of ”personal support based on money” has been applied in the business world, and is starting to be used in personnel management for shops and restaurants.

The advancement of digital technologies has further enhanced the convenience and affordability of methods for converting personal talents and resources into money via websites and apps. Although this is a worldwide phenomenon, China has added a distinct ”individual” factor. As individuals, Chinese people have a strong determination to make one’s way in the world without depending on companies or organizations, and are not averse to the idea of expressing goodwill or gratitude through money. Coupled together, these temperaments are leading to the widespread acceptance of a Chinese version of the tipping or reward culture.

Although still at its early stages, this ”nage-sen” or tipping system of showing support or appreciation by directly paying money to individuals is gaining ground as a new trend in Chinese society, which has a strong predisposition towards solving problems through individual connections. I would like to talk about this trend in this article.

Rapidly growing restaurant chain known for its excellent service

A restaurant chain called ”XiBei Youmian Cun” has become popular and has grown rapidly in the past few years in China. The restaurant’s selling points are its dishes made from fresh lamb meat and wheat from Inner Mongolia. The name ”XiBei” (西貝) is derived by separating the Chinese character of the family name of the restaurant’s founder (賈, ”Jia”). ”Youmian”(莜面, noodle) refers to the high-quality flour made from wheat harvested mainly in Inner Mongolia. The chain now has 320 shops throughout China, many of them found in big shopping malls in major cities.

XiBei Youmian Cun restaurants are known for their bright and modern ambiance.

Restaurants are mostly painted white and have bright, plain interiors that look clean and neat. Dishes are served in modern presentation styles, with a touch of Inner Mongolian grassland cuisine. I cannot make a sweeping comment about the taste since people have different personal preferences, but the reviews are generally good. I often see a line of people waiting to get in during the weekends.

One thing you will notice when you eat at the restaurant is the good service of its employees. Employees are always smiling, and once you are seated, they put a cloth over the box for your belongings and over your jacket on the back of your chair. After you order, they leave a big hourglass on your table to time the arrival of your food. If all the orders are not served within 25 minutes, they will not charge you for the meal. They always keep an eye on the customers and are quick to respond to any request, and the food is served really quickly.

2D barcode on the staff uniform

Employees wear a 2D barcode on their chest, and customers can give “ohineri” (tip) by scanning the barcode with their smartphones.

The motive force behind the excellent service of the restaurant is the so-called ”nage-sen” or ”ohineri” (tipping or reward) system geared at the employees. All the employees wear a badge with a 2D barcode and the words ”Thank you reward, \3.00” written on it on the chest of their uniforms. If the customers are satisfied with the service of an employee, they can scan the barcode on the badge using the WeChat app on their smartphone to directly give money to that employee. The basic amount for one ”dashang” is 3 yuan. The \ symbol stands for the yuan, the Chinese currency. Since 1 yuan is equivalent to around 16 yen, one ”dashang” is around 50 yen. (Note: Some shops in some cities have not adopted this system.)

Although the money initially goes into the restaurant’s bank account, according to the manager, the restaurant gives the entire amount to the employee. It may vary depending on the location of the shop, but if employees follow the restaurant’s customer service standards, in a month, they can receive up to a few hundred yuan, or equivalent to a few thousand yen. Since the average monthly salary of restaurant workers in cities range from 3000 to 4000 yuan, it means they are receiving an additional 10% of their monthly income. This is a substantial amount for common employees.

After paying a 3-yuan tip using a smartphone payment app.

This ”ohineri” (tip) is based on the discretion of the customer; employees are not allowed to demand for it. I have personally never experienced an employee asking for a tip. And, since 3 yuan is a not a big amount, customers usually do it just for fun. When I asked a staff working at a restaurant in a shopping mall in Wuxi, Jiangsu, I got a typical reply that ”in one day, I get a few tips from customers; but it’s not about the money, knowing that the customers are pleased with my job gives me motivation.”

Shop managers can also give ”ohineri” to their employees

A unique feature of this system is that other than allowing customers to directly give money to employees, shop managers are given a certain budget by the company from which they can also give ”tips” to employees as they deem necessary. Shop managers are given a monthly ”tipping budget” of around 500 to 1000 yuan depending on the size of the shop and the number of employees, and they can scan the barcode of an employee that they think had done a praiseworthy job to give money to that employee. This is literally a ”cash-based” evaluation system that gives shop managers an effective way to encourage their employees.

This barcode system is not only for the waiters and waitresses; even kitchen staff, including the cooks, cooking assistants, and dishwashers, also wear a barcode on their uniforms, which means that the benefits of the system also extend to those working behind the scenes, at the discretion of the shop manager. Although technically employees can also give tips to each other using the system, this particular function is currently not implemented. This system may be considered as a monetized version of the “thank you card” system seen in Japanese workplaces.

This system for evaluating employees at the workplace based on “tips” from customers has in fact already been commercialized by some companies as part of personnel management packages. Aside from XiBei Youmian Cun, many other nationwide and popular restaurant, business hotel, and karaoke box chains have already adopted this system.

”Encouragement through money”

I gave a 2-yuan ”hongbao” after arriving at my destination using the DiDI app.

Although not a direct money-based evaluation system, a similar function has been incorporated by DiDi, the number one taxi-dispatch app service in China, to its app, wherein customers may give drivers a ”bonus payment” (紅包 ”hongbao”) of around 1 to 10 yuan after paying the fare upon arriving at their destination. According to a driver I asked, ”around 1 in 10 passengers give a ”bonus payment,” with more passengers giving during New Years and other holidays.”

Also, the leading e-commerce company, JD.com, has a point system that allows customers to give an ”appreciation fee” to delivery staff. Since the points can be used for shopping at DiDi’s EC mall, they function like cash. This system of giving points as ”appreciation fee” is similar to giving tips or gratuity.

My favorite travel reservation site, Ctrip, which is the largest in China, has a function for giving your own Ctrip points to the staff who answered your inquiry via chat or telephone, along with giving your evaluation of his or her service. Recently I gave points worth around 10 yuan to a staff who kindly negotiated the cancellation of my hotel booking free of charge because I mistakenly double-booked my hotel reservation.

As mentioned above, these payments are made voluntarily, and there are actually more people who choose not to pay. However, it is clear that this system for evaluation and showing appreciation using money, rather than merely through words or star ratings, is gradually becoming widespread.

Directly paying money for contents provided by individuals

Aside from the monetized system aimed at enhancing motivation in business settings, a system for giving encouragement by paying money to ordinary people whom you would like to support for their works, ”ideas,” or ”advocacies” is also gaining ground. A typical example for this is the WeChat Public Account function of WeChat, the SNS that has virtually become the standard means of communication for Chinese people, with its now more than 1 billion users.

In Japan, the name of this function is usually translated as the ”WeChat Official Account” (ウィチャット公式アカウント), but I think it is more apt to use the word ”public” (公衆) rather than ”official” (公式). In this article, I am following the Chinese name and will use ”public” to be consistent. The function is similar to a blog that allows individuals (or companies) to widely publicize their own contents, and, if they wish, they can also receive monetary support from their fans (followers).

At the bottom of each content or article is a button called ”I like this author” (喜歓作者), which readers can use to directly give a specified amount of money using WeChat. WeChat is a daily tool used by more than 1 billion Chinese people, and other than for communicating with friends and work colleagues, many users also acquire information on daily news and various topics through the app. Published contents can wield a large impact if they can gain a certain level of attention. With an enormous population of users, one can achieve a ”thin-but-broad” impact even among a fraction of the users.

Gathering support for the advocacy on ”saving the city’s private businesses”

I have a friend named Yu Ling who has made her mark through the public WeChat. She used to work as an editor of a women’s magazine. Pained by seeing the small, privately owned businesses on the streets of Shanghai closing down one after the other due to increasing prices of rent and labor and the arrival of large retail chains, she decided to start a campaign from scratch to support the small business establishments.

Yu Ling started a campaign to protect the small shops.

Designating June 2, 2015 as the ”World Alley Walking Day,” Yu Ling started a movement encouraging people to ”go out into the streets instead of staying at home” because ”the streets are the world’s largest network!” She would regularly upload articles filled with images and videos themed ”Walking the streets with Yu Ling” on her public WeChat account about her visits and talks with owners of private enterprises mainly in Shanghai, and sometimes in other cities and even overseas, to encourage people to ”protect the small shops.” On a personal note, my wife also ran a shop selling silk products in Shanghai, and that’s how I met her.

Yu Ling’s public WeChat page

At the beginning, she had few supporters, and she did not want to take advertising money from the private businesses, so she spent her own money visiting the shops, with her husband doing the filming, and she working nights to edit and upload contents. It was obvious that she put so much hard work into it. Gradually, the Chinese mainstream media picked up her advocacy, and eventually, even the Shanghai City government started to shift its policy focus from big companies to favor privately owned businesses. Steadily, the number of her supporters grew.

”Nage-sen” (tip) of 7000 yuan for one upload

Even her ”ohineri” or ”nage-sen” (tipping) scheme did not pour in much money at first, wherein she started receiving only an equivalent of a few tens or hundreds of yen a day. But from around the later half of last year, the amount she collected started to increase, and in January 19th of this year, she recorded the highest amount received at more than 7000 yuan for an uploaded video and article entitled “Save the small shops of Shanghai!” Her page has since maintained a high level of support.

Most of her supporters give from 5 to 20 yuan, with some giving as much as 200 yuan. The maximum amount a supporter can give in the public WeChat ”nage-sen” system is 250 yuan; thus, the system itself is premised on a ”thin-but-broad” approach. Even though the amount has increased, the highest amount at 7000 yuan is equivalent to only 110 to 120 thousand yen, so even if she uploads several articles and videos a month, it would still not be enough to cover for the amount she spends for her campaign. The money she earns for doing advertising work is barely enough to support her daily life, and she continues to pay for her activities from her own pocket. Her enthusiasm remains high, though: ”I’m just happy that more and more people are supporting me. I always make sure to send a thank-you message to every person that gives to my cause, even if it’s just 5 or 10 yuan. Sometimes I have to write hundreds of messages, so it’s a lot of work!” she said laughing.

As of the end of 2017, public WeChat has 21 million accounts, increasing at a rate of 15-20% every year. Although not all of these accounts make use of the ”nage-sen” system, it is very clear that this system where individuals can directly and easily receive monetary support from their followers is steadily growing.

”Evaluation and support through money”

Performance-based apps where fans can give ”nage-sen” for people’s performances, such as dancing, singing, or band performances, or talks by good-looking and attractive personalities, have already existed in China for a long time, and are also seen in Japan. Stories of people getting rich through those apps by earning money equivalent to a few tens to hundreds of millions of yen; of fans, who actually earn much less, giving extravagantly and ruining their lives; or of children giving large sums of money without their parents’ knowledge, are common to both Japan and China. But this is what this ”nage-sen culture” is about, and I think it is actually a very good way for discovering various artists with unique talents and for them to develop those talents. This culture, I think, will only continue to become widespread.

What’s interesting about Chinese society, however, is that aside from this system of ”nage-sen for earning money,” there is also a growing trend for appraising and supporting individuals directly with money, as explained in the examples mentioned above.

Behind this phenomenon is the availability of highly convenient ways for instantly and directly giving money to another person at whatever amount, for virtually free of charge, through the widely used payment apps such as Alipay and WeChat. A much bigger factor, however, is the Chinese way of life that puts a high regard on connecting and aligning with individuals who share the same sense of values with them.

Expectations for changing society through individuals

Even when working as an employee at a restaurant, for example, most Chinese would think of themselves as separate from the company they are working for. Chinese people tend to value themselves a little too highly, and expect to be evaluated in a straightforward manner for the roles they play. And for the customers, when they find an employee with whom they get on well, they feel an attachment and would prefer to be served by that employee from then on. It is not unusual to see employee-customer relationships turn into personal friendships. The same thing is true for how they deal with taxi drivers and delivery staff.

Also, in China, many people possess a certain sense of chivalry that makes them willing to do everything in their power to help those people they connect with. In China, to be called ”noble-minded” or a ”person with a chivalrous spirit” (”義気” ”yiqi” in Chinese) is a very big compliment.

The advocacy of Yu Ling through the public WeChat mentioned above is a type of social movement that is similar to crowdfunding, so to speak. In her case, however, the support was for her as an individual, not for the project per se. In a society where it is virtually impossible to freely express your opinion against the government, people tend to pin their hopes of somehow realizing their dreams on people they share those aspirations with. Amidst a growing sense of stagnation in society, in a way, Chinese people are finding some kind of hope in the relationships of trust between individuals.

I believe that this person-to-person ”nage-sen” or ”ohineri” culture will continue to gradually spread not only in China, but also eventually in Japan. The social implications, however, I think will be more significant in Chinese society, where people tend to solve problems based on relationships of trust and where personal alignments between individuals drive the changes in society.

Nobuhiko Tanaka

Partner, Brighton Human Capital Consulting Co, Ltd. Beijing (BHCC)
Part-time Lecturer, Graduate School of Asian and International Business Strategy, Asia University (MBA)
Former Visiting Researcher at Recruit Works Institute

Mr. Tanaka currently resides in Shanghai, China. He graduated from Waseda University School of Political Science and Economics. After working for a newspaper company, in the early 1990’s he moved to China to work as a contributor and consultant on human resource management. His involvements include projects with RGF Human Resource Consulting, and business of a major casual wear chain in China. He also works as a consultant and adviser for major corporations both in Shanghai and Tokyo.

Recently he published ”Sukkiri Chugoku Ron: Suji No Nippon, Ryo no Chugoko” (Nikkei BP). (”Fresh insights on China: Japan’s emphasis on reason, China’s emphasis on quantity”) [in Japanese]

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