Every Internet Giant Wants to Come to Your Door. How Will Home Services Change Your Daily Life?

Before it changes the world, a few questions need answering.

Last Saturday, Helijia, a startup best known for in-home manicures, ran a promotion. By the end of the day it had taken nearly 47,000 orders for in-home manicures and beauty treatments. Of the more than 3,000 craftspeople on the platform, 131 earned over 10,000 yuan that day, and the top earner made 77,000.

Counting from the launch of its website last March, Helijia has offered in-home manicures for little more than a year. Before that, manicures were not a house-call business the way cleaning or food delivery was. Even for basic nail care, customers had to pick a salon on the street and sit down.

Now many other services are moving, as manicures did, from the storefront to the customer's home. Helijia alone has expanded from manicures into beauty treatments, hairdressing and even fitness. More and more startups are doing the same, and between them they cover nearly every part of life, enough that you could go a whole day, even a whole week, without leaving the house.

Every internet company wants to serve you at home

The big companies have now stepped into this market almost one on the heels of another.

In March, 360 added in-home services to its mobile assistant app, so that while you scan your phone for viruses you can also get someone to come over and do your laundry. A few days later, JD.com began testing a service that buys groceries from supermarkets for customers and delivers them within an hour. Soon the business was spun off into a home-services platform called "JD Daojia."

On April 21, 58's home-services arm, which already offered moving, cleaning and manicures, began adding third-party services such as car washing and massage. Two days after that announcement, the group-buying service Meituan added a home-services category to its app.

Over the next two months, Dianping, JD.com, 58 and Meituan each moved into more home services. Baidu gave its new "Life+" section a prominent spot in its app, where users can find food delivery, private chefs, medicine, car washing and other door-to-door services.

The market is so hot that even Qunar, a company that sells plane tickets, has thought about your need to order takeout.

Some of these moves look absurd, such as ordering takeout while you search for a hotel, or hiring a cleaner to take out your trash while you clear junk files from your phone. But the rush of big companies at least signals a trend: home services are becoming a normal part of life.

How will your life change?

You no longer need to go from massage parlor to car dealership to beauty salon to restaurant. You can sit at home and, through one app after another on your phone, have all kinds of service providers come to your door whenever you are free.

After couriers and food-delivery riders, manicurists, masseurs, car washers and housekeepers will become regular visitors to your home. Whether it is something your mother could do for you or something she couldn't, these internet companies are ready to do it.

To show how home services could change daily life, we drew up an imaginary schedule. If an ordinary office worker planned a week around in-home services, it would look roughly like this.

A week of home services

These services already cover life's most basic needs, eating, health and getting around, and even higher-order ones such as satisfying a craving, socializing and getting things fixed.

Some of them you could always summon by phone, such as ordering a meal, calling a car or sending flowers. Others you may never have thought of having brought to you, such as medicine delivery, screen-protector fitting or even phone repair.

On a weekend with the whole day free, you could easily line up five or six different "dates" — different service providers.

A weekend of home services

How did all this begin?

It may be hard to imagine now, but booking a car to the airport for next Monday morning once began with flipping through a Yellow Pages crammed with phone numbers to find a car-rental company's number and address.

When internet companies first offered lifestyle services, all they did was move the Yellow Pages online. They charged merchants a fee and displayed their information. Before going out to eat, you might open Dianping to check a restaurant's address, reviews and signature dishes, or see which nearby restaurant had a group-buying deal and go there.

Merchants, in turn, paid the internet companies for better exposure. Yet even after Dianping and the group-buying sites took control of payment, letting users order, pay and leave reviews in the app, one fact remained: the platform could not reach into the service itself and had no control over the merchants.

Without the internet companies' listings and promotion, merchants could still do business as usual. Without the extra exposure, the worst that could happen was that they earned a little less.

What's more, because merchants settled accounts directly with the internet companies, and even the reviews were addressed to the merchants, how well a service worker performed was not fully tied to his or her pay. The incentive to serve customers well was weaker than it is with home services.

It was like the taxi-hailing wars. In 2013, companies in China burned through several billion yuan between them and still failed to change the car-service industry. The problem was that taxi drivers did not need those companies' apps to make money.

But Uber's success around the world taught a lesson. It cut out the middleman, used technology to allocate drivers efficiently, and split its revenue directly with the people providing the service. And drivers had only one way to get a job: wait for the system to assign it. Control stayed firmly in Uber's hands.

That also let the company expand to more cities quickly and in a standardized way. On ride-hailing alone, Uber became the largest startup on the planet in just six years. Today, companies such as Didi Kuaidi and Shenzhou, which first tried to enter the transportation market through taxis and car rental, have all switched to the same model: chauffeured car services.

And the car business was not the only one to learn the lesson.

In March 2014, Helijia became the first company in China to apply a similar model to home services, starting with in-home manicures. Half a year after Helijia launched, the big companies arrived. 58.com, a classified-listings company, brought together housekeepers, movers and manicurists to launch a home-services platform, 58 Daojia.

From many standalone apps to an aggregating platform

Home services are no longer a business a small startup can do well on its own. Baidu, Taobao, JD.com, 58, Meituan, Dianping and 360 are all trying, each in its own way, to take on every service you might use at home. Whether they build a team from scratch or bring in independent third-party startups, the big companies are pouring more money and more traffic into this market.

How do these companies provide home services?

Startups like Helijia could at first only start in a single niche and run a fairly narrow business. That model is very easy to get going. When the in-home massage company Gongfuxiong launched, for example, it had only 30 masseurs serving all of Beijing.

But when demand outstrips supply, these companies grow far faster than a massage parlor can open branches. In little more than a year online, Helijia has spread from Beijing to six cities, and its services have grown from manicures into beauty treatments, hairdressing, fitness and other beauty-related categories.

Car washing, which looks unprofitable, follows the same logic. Qie Jianjun, chairman of Guagua Car Wash, told QDaily in an interview that washing cars alone does not make money, and that the company plans to move into higher-margin services such as light car detailing.

On one side, entrepreneurs in single niches are spreading into more categories. On the other, big companies are using their traffic to absorb more services. When 58 Daojia announced its 2.0 platform this April, the home-services industry gained a place that gathers many kinds of services together. Home services now have platforms like JD.com and Amazon in e-commerce, with a self-operated part alongside services from third parties.

The "self-operated plus third-party" platform that Amazon pioneered in its early years is a controversial model in e-commerce: once a new line of business becomes profitable enough, the platform runs it itself and drives out the third-party merchants who got there first.

At the same time, unlike group buying or ride-hailing, home services come in many varieties, and apart from calling a car or ordering takeout, every in-home service is used infrequently. Seen this way, the platforms' lack of hurry to expand their self-operated range is a calculated choice.

Knowing the business is another reason platforms move cautiously into new categories. Guo Yi, vice president of 58 Daojia, told QDaily: "For the foreseeable future at least, our self-operated business will not grow dramatically. The reason is that we would need to find that many people who know every one of these fields well."

Platforms generally do not ask third parties to sign exclusive agreements. So within any given category, users on different platforms may in fact be using the same handful of providers.

Of course, some of the big companies' moves make little sense. Take 360 and Qunar. The former put its home-services entrance inside a mobile assistant used for downloading apps and clearing memory, and even plugged in Meituan's food delivery, which was already a platform in its own right. The latter, a service for booking flights and hotels, has somehow added food delivery too.

Home services will eventually change the definition of work

For all their flaws, the internet companies' rush into these industries has already changed them.

For consumers, home services simply cut out the trip to the shop. But once the middlemen and physical stores are gone, the way people in these trades work changes too. The platform becomes one giant shop, and craftspeople answer for their own service quality, reviews and brand.

Momo, a beautician with the in-home beauty service Meirong Zongjian ("Beauty Director"), told QDaily that she now takes 8 to 9 orders a day. Some regular customers book 3 to 4 at once and get a full-body treatment in half a day. She makes more than 10,000 yuan almost every month. At a beauty salon, doing the same amount of work, she earned only about a third of that.

How the income model has changed

A manicurist's income used to depend directly on the salon's business. Besides fixed costs such as rent, a physical store has to pay for all kinds of online and offline promotion, and the pay of the owner and the manager also comes straight out of what the manicurist earns.

Home services change this model. In a phone app, users choose the service they want with a single tap. For people who open apps to kill boredom, using home services is like window-shopping or browsing Taobao: a want that can arise at any moment.

Once a user places a request, an algorithm automatically matches them with someone who can provide the service. Every order goes straight to an available craftsperson, and with no middleman, communication naturally becomes more efficient.

Home services also move the venue from the shop to each customer's home, so the location, foot traffic and decor that a physical store has to worry about no longer matter. As for the middleman, the shop, the owner and the manager, home-services platforms replace them with systems, algorithms, traffic and supervisors.

Before it changes the world, some things remain unsolved

Some home-services companies still hire employees and then plug them into internet platforms, just as chauffeured car services in China at first relied on car-rental companies that employed drivers.

But nothing spreads faster than word of how to make more money, and workers will inevitably drift away from such companies and join the platforms directly as individuals to earn more.

Cutting out the middleman and building a more efficient system is certainly not a bad thing, but the process has also stirred doubts and conflict. Over the past six months, clashes between chauffeured-car drivers and law enforcement have shown this most directly. Part of the conflict is traditional companies striking back after losing market share, but there are real problems too, such as protection for workers on the job, and financial security after retirement or illness.

Almost every home service today is still at an early stage, using high subsidies and low commissions to attract workers. When a worker's income jumps from 4,000 yuan a month to 12,000, the missing protections don't seem to matter.

But as the number of workers grows and users get hooked, the dominant internet platforms will cut subsidies and take bigger commissions, since that is where their profit comes from. In the US, where ride-hailing is most mature, Uber's drivers now come mainly from low-income immigrants. Their share of fares has fallen from more than 90 percent at the start to as little as 70 percent today, and that is while fares themselves have been falling.

When the inevitable drop in income arrives, the tensions now being papered over will break out. As Hillary Clinton said in a speech earlier this month: "The 'on-demand economy' is creating exciting economic opportunities and innovation. But it is also raising hard questions about workplace protections and what a good job will look like in the future." Several tech venture capitalists who have invested in such companies have backed the questions she raised.

Neither the internet companies nor the regulators have answers yet. The answers will come as home services change the world.

One thing is certain: wherever home services take the shape of traditional jobs, it will not be the work we once knew.

Infographics: Lin Yuyao | Cover images from Medium and applicoinc