What Role Do Ubiquitous QR Codes Play in Digital Transformation?

Original: https://cli.im/article/detail/2066

Should I scan you, or will you scan me?

For most domestic internet users, this kind of conversation has become part of daily life. Scanning codes for payments, logging in, ordering food, adding friends, checking product information... The small squares composed of black and white pixels have long become the most familiar internet product for Chinese people.

So much so that during the "China National Pavilion Day" event at the 2022 Dubai World Expo, Tencent spent a full 70 minutes live-streaming to introduce the global audience to the Chinese lifestyle of "life on the code," covering the application of QR codes in various fields such as daily life, manufacturing, cultural preservation, and public management.

However, when discussing the topic of digital transformation, QR codes are rarely mentioned. This technology, which permeates every corner of society like capillaries, seems to have become a "forgotten" subject.

The "Second Hometown" of QR Codes

As early as around 2018, an industry claim emerged that China was already the country with the widest application of QR codes, accounting for over 90% of global QR code usage.

Although the authenticity of this data is unverifiable, one fact cannot be denied: China is not the birthplace of QR code technology, nor was it the earliest market to adopt QR codes, yet it is the country with the highest penetration rate and the most diverse application scenarios for QR codes.

Rewind to 1994. Masahiro Hara, an engineer at the Japanese company Denso, spent two years inventing the "回"-shaped QR code to solve the high error rate of barcodes in production management. The scanning speed was greatly improved, and even with up to 30% damage, it could still be accurately recognized. Hara named this technology "Quick Response Code," whose English abbreviation is the well-known "QR Code."

To overtake competitors in the QR code race and attract more companies to buy their scanners, Denso even opened up the relevant technology patents. However, in the following years, QR codes were only used by some convenience stores and were once mockingly called "Galapagos Technology," referring to technologies that can only be used in an isolated market.

By 2009, the United States, riding the wave of the mobile internet, began experimenting with QR codes. Products like Google Maps attempted to use QR codes to connect online and offline worlds. Unfortunately, at that time, users needed to install specific apps to scan QR codes, and the cumbersome experience left most users uninterested.

The turning point for QR codes ultimately occurred in China.

In May 2012, WeChat founder Allen Zhang posted on his Moments: "The entry point for the PC internet is the search box; the entry point for the mobile internet is the QR code." At the time, many people disagreed with this view. Some bluntly stated they had never used QR codes, while others believed QR codes were merely information entry points.

It wasn't until six years later that Pony Ma publicly explained the reason for betting on QR codes back then: "As early as 2012, we believed QR code technology was important. Designing WeChat's 'Add Friends' feature around scanning codes was to make users instinctively know that scanning a QR code means pulling out WeChat."

Perhaps Tencent's intention to promote QR codes wasn't entirely pure, but it successfully cultivated the "scanning" habit among Chinese users. Coupled with tech giants' anxiety about the mobile internet wave, the value of QR codes as an entry point was continuously explored: WeChat Pay launched in 2013, deeply integrating the payment process with QR codes; the "Ride-Hailing War" began in 2014, where the most successful ground promotion method was having users scan codes to download apps; the shared bicycle competition started in 2015, with almost every bicycle sporting a QR code, allowing users to scan and ride...

Also around 2012, QR code generation, decoding, and beautification tools like CaoLiao QR Code and QuickMark emerged. If WeChat solved the scanning entry point, these tool-based products further enriched the versatility of QR codes: text, URLs, files, images, and more could be quickly converted into QR codes through generation boxes. QR code patterns were no longer limited to black and white squares; colors, backgrounds, and logos could be customized.

In past narratives about QR codes, these tool products were seldom discussed. However, looking back at the application history of QR codes in China, tool-based products actually played an indispensable role. A simple QR code generation box opened the door to QR codes for ordinary people. Even non-technical individuals without coding knowledge could create the QR codes they needed. QR codes were no longer a privilege for a few companies but a普惠 technology accessible to everyone.

Although QR codes did not originate in China, it truly became their "second hometown," not only unleashing their application potential but also enabling every ordinary person to use QR codes to solve problems. Just as external evaluations of "Chinese-style innovation" suggest: technological applications are creatively combined with the broadest population.

A New Interpretation of Fine-Grained Management

Regarding the reasons for the explosive phenomenon of QR codes starting in China, platforms like Zhihu host many related discussions, gradually converging on two near-consensus answers.

First, the popularization of smartphones; Denso's failure in the 1990s was primarily due to the limitations of scanners, restricting QR codes to specific scenarios and enterprises. Smartphone cameras drastically lowered the barrier to scanning, laying the mass foundation for the universal adoption of QR codes.

Second, weak information infrastructure; unlike the developed financial systems in European and American markets, China's financial infrastructure was very weak over a decade ago, indirectly enabling the rise of QR code payments. Consumption is precisely the underlying driver of societal information transformation, allowing QR codes to play a significant role in China's informatization process.

Such explanations are reasonable but only half correct. Just as Allen Zhang once defined, QR codes are the entry point to the mobile internet. As the mobile internet红利 fades, has QR codes' historical mission ended? Even the "Father of QR Codes," Masahiro Hara, held a similar view. In 2014, when the European Patent Office awarded him the European Inventor Award, he predicted on stage: "QR codes have at most 10 years left."

It wasn't that Hara was short-sighted and misjudged QR codes' lifecycle, but rather that the value of QR codes evolved through repeated practical applications.

In the context of the mobile internet, QR codes were positioned to connect online and offline, with applications定格 in basic functions like opening websites and adding friends. In the era of the Internet of Things, QR codes are entrusted with a new vision—connecting everything, linking item information to achieve fine-grained management of people, events, and objects.

Numerous examples can be found.

Within the Industrial Internet identification and resolution system, QR codes, alongside RFID, serve as "identifiers." Each QR code label acts like an "ID card" for equipment. Scanning the QR code reveals various details about the product's production specifications. Data is aggregated onto large screens, providing a clear overview of the entire factory's production status.

In 2022, Zhejiang Province began building a demonstration zone for the Global Migration to Two-Dimensional Codes (GM2D) plan. The core idea is to completely replace barcodes with QR codes and use them to connect upstream and downstream links such as production, warehousing, logistics, and sales. Scanning a code enables functions like product溯源, payment settlement, and viewing product information.

The surprising aspect is that fine-grained management using QR codes isn't limited to the "grand narratives" mentioned above. Small and medium-sized enterprises and individuals empowered with QR code generation capabilities are also exploring new scenarios for QR codes.

Wang Jianding is the head of the supervision department in a manufacturing company. To address employee safety training issues, Wang tried converting documents, regulations, and other materials into easy-to-understand videos. He then uploaded this content to CaoLiao QR Code. Employees simply need to scan the code with WeChat to access the corresponding training materials. Wang can monitor employees' learning progress in real-time through the backend and collect their feedback.

Zhang Yang, responsible for equipment inspection in a construction group, discovered another application scenario for CaoLiao QR Code: He created a QR code for each piece of equipment requiring inspection. By linking forms to these QR codes, maintenance personnel only need to scan the equipment's QR code with WeChat to fill out inspection reports. If any faults are found, they can record the results directly using photos, audio, or video.

Perhaps this is the true charm of QR codes.

Neither the application scenarios nor the interaction methods were defined by one or two so-called giants. QR codes, as a "democratized tool," were handed over to everyone who needed them, then融合 with the needs of different individuals, enterprises, and industries, giving rise to new scenarios, new formats, and new models. The evolution from an initial online-offline entry point to a new solution for fine-grained management is the best footnote.

The Silent "Bridge Builder"

A pressing question remains: QR codes are already the gateway from the physical world to the digital world,渗透 into every aspect of life. Why do they lack presence in discussions about digital transformation?

Perhaps we can refer to the views of Xu Li, Chairman and CEO of SenseTime, on "innovative breakthroughs and普惠 applications": Between scientific and technological breakthroughs and truly becoming a普惠 technology, there are two distinct stages. The first stage is "reaching the pinnacle," and the second is "becoming widespread."

Concepts like artificial intelligence, cloud computing, big data, and blockchain, currently highly popular, are undoubtedly in the "reaching the pinnacle" stage, often emphasizing the changes new technologies bring to productivity, sometimes even exaggerating their value, despite various remaining barriers in implementation.

QR codes, nearly 30 years old, have long passed the "becoming widespread" stage, to the extent that people are almost "indifferent" to this technology. Like water, it works silently and imperceptibly, causing its presence to be overlooked. This is the most distinct characteristic of普惠 technology: it no longer seems "sexy" yet is omnipresent in daily life.

The "silent" nature of QR codes doesn't mean they lack potential in the wave of digital transformation. On the contrary, they are playing the role of a digital "bridge builder."

Take the health code during the pandemic as an example. The bridging role of QR codes is evident: residents voluntarily input information, the platform verifies the data, performs real-time updates and statistical analysis. The originally complex information reporting and management system was simplified into a two-ended relationship between the platform and the user.

Addressing the practical needs of digital transformation, QR codes, which have already demonstrated their capability in fine-grained management, have paved a "visible path." Evolving from an encoding standard and technology, they have become an industrial bridge connecting people, information, products, and services, fostering innovative applications like one-code-per-item, one-code-per-event, and one-code-per-person in retail, finance, transportation, manufacturing, construction, and other industries.

According to the "Guidelines for Digital Transformation of Small and Medium-sized Enterprises" issued by the Ministry of Industry and Information Technology at the end of 2022, digital transformation service providers should focus on the pain points and difficulties faced by SMEs, offering "small, fast, lightweight, and accurate" products and solutions to lower the barriers to digital transformation for SMEs. Faced with shortcomings in talent, funding, technology, and management among SMEs, isn't QR code technology, as a普惠 technology, a potential solution?

The desire to accelerate digital transformation using QR codes isn't unique to China. Beaconstac, a QR code management platform founded in 2019, announced a $25 million Series A funding round in early 2023. Its main business is helping companies design branded QR codes and track their usage. Its co-founder and CEO, Sharat Potharaju, stated: "We are seeing more and more businesses adopting QR code technology to streamline processes. The pandemic accelerated the digital transformation of businesses, faster connecting the physical and digital worlds."

It is worth noting that the capital-favored Beaconstac resembles a product "Copied from China." For instance, the aforementioned CaoLiao QR Code has gradually evolved over the past decade from a QR code generation and beautification tool into a cloud service using QR codes as an entry point. Its services now cover equipment inspection, asset management, personnel information management, paperless registration, and more. Moreover, compared to IT management systems costing hundreds of thousands, the annual subscription fee for CaoLiao QR Code's cloud service has been compressed to the thousand-yuan level.

The result of intense industry competition is that QR codes are becoming a "cost-effective alternative" for many lightweight digital applications. At least according to the Aladdin Index, CaoLiao QR Code's ranking among tool-based mini-programs is on par with Tencent Docs and Baidu Netdisk. The breadth and depth of QR code applications in the Chinese market have already positioned it as a global leader.

From a global competition perspective, QR codes represent one of the few areas where Chinese companies have a first-mover advantage, boasting mature user habits, a solid industrial foundation, and vast application potential. In the practical choices of digital transformation, we should not underestimate the immense energy contained within QR codes nor overlook the universality of普惠 technologies and democratized tools.

Final Words

The story of QR codes continues.

Perhaps in another five or six years, people's understanding of QR codes will no longer be "Should I scan you, or will you scan me?" The black and white squares will become an increasingly irreplaceable part of life, continuously integrating with new technologies as a "bridge builder," becoming a significant force influencing the digitalization process across various industries in China.

Note: Wang Jianding and Zhang Yang are pseudonyms.

Article reproduced from 36Kr: 《What Role Do Ubiquitous QR Codes Play in Digital Transformation?》