Quality Expert

YouTube Video

Idea Summary

Write a summary paragraph: In about a paragraph, describe what problem you are solving, how many people are experiencing the problem, and what your solution is.

We are going to build an information platform for collecting and disseminating product quality standards information. We are planning to reach consumers through a mobile phone application. Users will scan products using the app when they are interested in learning about the product’s quality standards information. The users will then be linked to a page displaying the quality standards that the product has passed, certified by credible domestic and international quality assurance institutes. We hope that our app will facilitate and promote the usage of quality standards as a decision criterion for consumers’ purchasing decisions, solving the problem of asymmetric information in the market.

The key uses or benefits that our application will bring are:

(1) Consumers will be able to quickly obtain credible product quality standards information so that they may purchase the lowest-priced products that meet their desired quality standards

(2) Manufacturing firms can utilize the app as a method of informing consumers as to the quality standards of their products. Particularly, small and mid-sized manufacturing firms can bolster consumers’ faith in products that do not have high brand recognition, enabling the smaller firms to compete with the large players in the market.

(3) Quality assurance organizations, both domestic and international, will receive more requests of quality assurance services from the manufacturing/food processing companies. The quality assurance organizations will be able to inform many more consumers of their information.

Tell us more about the problem you are solving.  Why is it a problem and how big of a problem is it?

Customers do not have reliable and credible information about the quality of many products beyond the limited introductions sometimes printed on the outside of the packaging. The problem becomes much bigger problem when the products being products could potentially pose a threat related to food safety or health. Currently, customers do not generally have the ability to get answers to questions related to product quality standards, such as:

Does this product have residuals that exceed my desired level?  Was this product processed through a organic production method?  Was this product produced using child labor?

Quality inspections usually serve as a good method of determining the quality of the products, particularly in terms of the specific quality standards that a product has passed. However, most of this information is not normally passed on to consumers who aren’t currently given easy access to the information

The quality assurance mechanism in China is faced with challenges of transparency and reliability. For example, in 2008, a milk powder poisoning incident occurred in China that harmed thousands of victims. The cause was milk powder products from 22 Chinese dairy companies that were contaminated with melamine. Among those products that were contaminated, many of them were those that were granted “free of test” brands by governmental quality supervision organizations.

An article in the Financial Times stated that young, white collar consumers and middle-income consumers in urban areas could not easily get reasonably priced high-quality goods. Many Chinese consumers have to spend extra money to buy “big brand” products to ensure the products that they are purchasing are safe. Unfortunately, consumers who are not wealthy enough to afford high-end products are forced to choose between the cheaper products without reliable information concerning their product quality standards. 

Additionally, the asymmetric information about the quality of goods also creates barriers for small and middle sized companies to compete with the existing “big names” in the market. Small and middle sized companies are at a disadvantaged position in terms of marketing and advertising ability when compared with the big brands. They cannot easily educate customers about the quality of their products, nor to build up the credibility of their brand name among consumers.

Who do you think your target customers are and how many are there?

The target app users are individuals who live in big cities in China who frequently and comfortably use smart phones with access to the 3G or comparable network.

Since our product is an application for smart phone users, the potential number of customers would first be limited by the number of smart phone users in China. According to a study conducted by media research company, over 200 million smart phones are currently being used in China. Then, we can reasonably assume that the majority of individuals who are concerned with quality standards of products are those who live in urban areas. If we estimate that half of the total population will smart phones live in these urban areas, our potential customer base is 100 million people. And finally, we estimate that only one tenth of those people have 3G or a comparable network on their phones. As a result, our estimated total potential market is 10 million customers. Due to the rapid development of Wi-Fi and increasing coverage of 3G or better networks in China, we believe the user market will grow dramatically in the future. 

Do you think your customers are looking for a solution?

Definitely! An ever-increasing number of people in China are concerned with the quality of the products they are purchasing. As a result of multiple food poisoning and food-related public health accidents, people in China have become very cautious when purchasing products; they have become suspicious of the quality of the products in China. Additionally, the products produced by foreign companies can be too expensive to purchase. So, customers want to know more about the quality of products that are made in China, especially new products, or products from small or middle sized producers that lack high brand awareness.

Tell us about your solution.  How does it work and what are the benefits?

Our idea is to build an information dissemination platform to help consumers retrieve credible information on the quality of the products they are purchasing. The most reliable and uniform method of determining the quality of products is by using the results of quality inspections from credible quality assurance agencies. Our information platform will promote producers to disclose the quality certificates of their products or production procedures to help consumers understand their products better and have trust in their products.

Ideally, we hope to support a growing social trend pressuring manufacturing firms to have their products inspected by quality assurance organizations. We are also planning to absorb quality assurance organizations into our model. If consumers begin to care about the quality standards that the products they purchase have passed, then producers will have an incentive to conduct quality tests to prove the quality of their products. Therefore, quality assurance organizations would be able to increase the number of products they are testing, and the amount of information they can provide to consumers. We can collaborate with quality assurance organizations, both non-governmental and governmental ones, as well as international quality assurance institutes, and ask that they help us in promoting the idea of using quality standards as a decision criterion in purchasing decisions.  We can collaborate with them to help the public better understand what quality standards are about, and how those standards would influence the quality of their products and the health of users.

Our company will serve to verify, collect, and disseminate the quality standards information. We will build a mobile app that the consumers can download for free to get information about the quality standards of the products they are considering purchasing. 

What's your plan for developing your product or service including some dates and milestones?  

1. Gather a team - We currently have four members on our team. We are responsible for the establishment of shared business goals and a business plan. We plan to recruit needed software developers to develop the app.

2Demonstrate that people want our product. (It is a continual process typically in the first part of our database)

3.  Contact target Chinese industry associations and build the relationship with government departments, search for manufactures and their products’ information (It is estimated to take 9-12 months after we gather our team)

4.  Build the basic framework of website/database based on the collected information(It is estimated to take 3 months after we begin to contact target Chinese Industry Associations)

5.  Upgrade our website/database to the second version and contact manufacturers to further popularize our website/database and business model among them (It is estimated to take 3 months after building the basic framework)

6.  Attract/convince manufacturing companies to provide the information to our database with their quality assurance information. (Goal:get 10,000 companies to join.)

7.  Considering make an App and sell it both on Apple shop and Android Shop. (It will happen around the first year of our database.)

8.  Raise money to enlarge our business and clients, investment to advertisements and Media advertisement.

9.  Figure our how to scale (It is estimated to take 1-3 months to figure out)

How much funding to get to a company exit?

Frankly speaking, we cannot give an accurate number here, but we estimate it around several hundreds of thousands depending on the market response. According to our plan, our website/database will achieve break-even after four to five years. At that time, we will have 1 million core clients using our App, and more than one hundred thousand manufacturers provide product information to us to update our database at that time. The advertising fee from manufacturers and the revenue from Apple store are the main source to cover our operation cost. We will seek for acquisition by Alibaba or other big companies who are focus on B2C model and need our service and clients to complement their own business.

Tell us about yourselves (Who is on your team, what are you studying, what year are you)

(Claire) Ying Shi is a second year master of public policy student at Duke University. She interned in the World Trade Organization last summer and got this entrepreneurial idea from the exposure to standards related WTO conferences. Before coming to Duke, Ying studied journalism and economics at Tsinghua University, China and had internship experiences with Booz &Co. Consulting, Ogilvy PR and newspapers.

Kai Qu is a first year graduate student from Master of Engineering Management Program. He is interested in marketing research and public health. Through course studies and internships, Kai is well tuned with business related skills.

Yue Teng is a first year master of Engineering Management student at Duke University. He finished his undergraduate study in the School of Business of Fudan University, majored in Management Science. During his undergraduate study, besides leading a 112 student class to win the top award from the Ministry of Shanghai Government, Yue also took part in several business case competitions and showed top performance in most of them: being the only undergraduate winner of “Talented Seeding Program” with a prestigious scholarship from Nielsen Company as one example. In the penultimate year of undergraduate study, he had a summer research analyst intern in China Investment Corporation, engaged in “830” project to design the modeling of Daily Valuation and Weekly Concentration report for Senior executives.  

Matthew DeVito is a first year master of Engineering Management student at Duke University. He finished his undergraduate study at Vanderbilt University, majoring in Chemical and Biomolecular Engineering with a minor in Financial Economics. He is currently the president of the Finance Club of Master of Engineering Management program at Duke University. He previously served as Vice-president of the Engineering Student Government at Vanderbilt.

Use of Funds - if you won $50,000 how would you use it?

We would use the $50,000 for three purposes. One, we will conduct more extensive market research to accurately determine the needs of our potential customers. Two, we will build the information platform and mobile app. We will need to either hire third-party support or recruit skilled engineers with coding capabilities to build the fully functioning app and information platform system. And three, we will reach out to manufacturing companies and quality assurance organizations to share our concept and gain their cooperation. We will begin with the manufacturing companies in one of our sectors to run a pilot test.
Anything else you would like to share with us? 

Starting March 21st, vote for us on the Duke Start-Up Challenge Facebook Page!  And be sure to join us for the Grand Finale on April 20th at 7:30pm ET in Geneen Auditorium at the Fuqua School of Business, or live on Duke's Ustream Channel.  RSVP for the event on Facebook

Subpages (1): Quality expert video
Yue Teng,
Mar 21, 2012, 8:59 AM
Yue Teng,
Mar 21, 2012, 8:59 AM