Scan-to-order sweeps across China, to customers’ chagrin

“How it works here,” explained a server at a popular restaurant in downtown Shanghai, “is if you order through your QR code on WeChat, you can get 10% off your first order.”

“Scan this one,” she said, pointing to a QR code inside a plastic upright frame. “You can all order at the same time but pay separately.”

And then she did something you don’t typically see from waiters anywhere else: she walked away.

For many diners in China, this is the new procedure at sit-down restaurants. Want to see a menu? Scan the QR. Want to order? Just do it from your phone. Need the bill? It’s all at your fingertips.

As early as 2017, on-site QR ordering systems were implemented in restaurants by Koubei and WeChat mini programs, the platforms developed by tech giants Alibaba and Tencent. A proxy war of menu digitalization sprung up as part of these companies’ larger battle for market dominance in everything from shared bikes to delivery apps. This came at just the time when online food delivery was exploding.

The system works in different ways. In some cases, customers will be directed to the page of a digital menu, operated either through independent mini programs developed by restaurants or via food service apps such as Meituan. However, other times, people have to follow restaurants’ official subscription accounts on WeChat, which means their personal information, such as WeChat ID, phone number, and gender, will be acquired by the business.

Like other technological innovations in the recent past, the rate of adoption of QR-ordering was quick. According to a 2018 report conducted by CBNData, a consumer market research company, the number of restaurants using Koubei’s mobile ordering system surged 44% in the first quarter of 2018 compared to the second quarter of 2017. The adoption rate of mobile ordering restaurants increased 79% over the same period.

“Implementing QR codes at our restaurant can save around 30% in labor cost,” a manager at a Cantonese diner in Shanghai told me.

But beginning this year, “scan to order” has faced scrutiny in China from diners, media, and even government agencies, citing data privacy and technical challenges for the elderly. On the microblogging platform Weibo, hashtags such as #Is QR-based ordering more convenient# have garnered more than 150 million views.

“Requiring personal information, making us download the app, following the subscription account…ah I just need to purchase something,” reads one comment on Weibo.

According to a study conducted by the Chinese publication 21st Century Business Herald in early 2021, less than half of respondents said they prefer ordering through QR rather than a human server. The top reasons are “being forced to follow WeChat subscription accounts” and “being forced to share personal information.” In addition, 93% of respondents said traditional menus should not be removed.

“The main advantage for businesses is collecting valuable data from customers about their experience interacting with their services and brands,” said Bruno Abrahao, an assistant professor of Information Systems and Business at NYU Shanghai. “This data enables predictions and descriptive analytics about customer behavior and preferences.”

He said that the data gathered can be used to segment customers into different behavioral categories, and help establishments “optimize their interaction with customers, adjust prices, target specific groups with advertisements, and personalize each customer’s experience.”

In contrast to China, QR code-based transactions in the hospitality industry in the West is a relatively new phenomenon, which only experienced fast growth during the pandemic. According to a CNBC article from August, the link management service Bitly said there was a 750% increase in QR code downloads in the U.S. in the 18 months prior.

“There is currently a more profound public debate in the West regarding the pernicious effects of invasive technologies, and companies have been experiencing increasing scrutiny and facing increasing regulations,” Abrahao said. “However, in China, users tend to perceive the collection and integration of data as a lesser concern.”

As a result, Abrahao said, this has influenced the design of digital menus. “Usually, in the West, scanning a QR code opens a web browser tab with the menu content, which can collect limited personal information. However, in China, digital menus frequently require users to scan QR codes using platforms like WeChat and Alipay.”

Ashley Miao, a Shanghai resident in her 20s who eats out quite often, said she is not a big fan of QR-code ordering.

“I think I have reached a limit in terms of the number of WeChat subscription accounts a person can follow — something around 1,399,” she said. “I really don’t like it if a restaurant asks me to follow their social media accounts, it feels like they are asking to collect my personal data in an indirect but compulsory way.”

Miao also said digital menus are sometimes difficult to use. “I got the order of our whole table messed up last weekend at a gathering. I thought I placed the order after putting a few items in the shopping cart, but it turned out that I forgot to submit the order after all — it should have been easier for customers.”

She said that the digital ordering system does not entirely support multiple people ordering at the same time. “Depending on the system that restaurants use, it could be quite annoying if it ends up becoming a double order,” she said. “Also, the food pictures shown on the cell phone are not compelling and vivid, compared to real menus, which restaurants can actually put a lot of effort into designing.”

Jerry Min, 37, said personal information collection does not worry him that much, but he still prefers to order through servers because paper menus usually come with better photos. In addition, he thinks servers can make recommendations.

Min said when he goes out, he wants to make real connections in whatever space he ends up in. He believes if a restaurant or cafe totally relies on QR ordering, “It is no different from ordering takeout on your phone.”

The system has also left the elderly population behind in a country that is getting older. Chinese state media People’s Daily published a commentary in February calling restaurants to provide a choice for customers when it comes to ordering. “Some among the elderly population may find it challenging to order via cell phone,” they wrote. On Weibo, the topic #People’s Daily discuss QR code-based ordering# attracted over 330 million views.

Regarding this, Kendra Schaefer, partner at Trivium China, believes it has to do with the government’s concern about the impact of advanced technologies on the socially disadvantaged. “The state’s concern in relation to automated self-service models such as QR ordering is the impact on marginalized groups, such as less tech-savvy elderly citizens and the unbanked population,” she said. “There is a concerted push from top leaders to ensure that increasing automation does not widen the digital divide between young, modern urban dwellers and rural migrants and elderly citizens that may not have access to online payment platforms.”

However, Min and Miao both agreed that there are some advantages of paperless ordering. Miao said digital menus can be very clearly categorized, simple to navigate, and good for introverts; Min said QR codes can help reduce order errors, and makes it easier whenever people want to add something in the middle of a meal.

Love it or hate it, QR-code-based ordering isn’t going anywhere.

“The advantages that data analytics brings to businesses are precious to their bottom lines and essential for their competitiveness,” Abrahao said. “For most customers, the convenience and benefits that these tools bring outweigh privacy concerns.”