51 Social Security: Internet Disruption Makes Social Insurance Better

Currently, as China’s economic structure undergoes transformation, small and medium-sized enterprises (SMEs), particularly those in the tertiary sector—including startups—are experiencing robust growth. Meanwhile, social welfare policies such as social insurance are becoming increasingly comprehensive, with labor authorities mandating that enterprises enroll in social insurance schemes. Consequently, providing social insurance contributions for employees has naturally emerged as a primary concern for the continually proliferating micro, small, and medium-sized enterprises.

51 Shebao Network, which officially launched last October, specializes in handling corporate social insurance, payroll disbursement, supplementary medical insurance, and other services. It enables enterprises to make payments online while submitting materials offline, outsourcing non-value-added, cumbersome administrative tasks to third-party providers, thereby alleviating the workload of corporate HR departments.



Disruption 1: The Auspicious Trio of “Bao”: Entrepreneurship Bao / Employment Bao / Freelancer Bao

On the 51 Shebao website, three types of services are clearly visible: Chuangye Bao, Yonggong Bao, and Ziyou Bao.

Among these offerings, “Chuangye Bao” (Startup Protection) is a new service launched by 51 Shebao for startup companies. Under traditional offline procedures, establishing a company has been a laborious and costly endeavor, requiring completion of four statutory steps: business registration with the Administration for Industry and Commerce, opening a corporate bank account, tax registration, and opening social insurance and housing provident fund accounts. Typically, completing this entire process takes three months or even longer. However, on the 51 Shebao online platform, the application process for Chuangye Bao is as simple as online shopping. Priced at RMB 199, it requires customers to place an order first, then discuss details with customer service representatives, and finally mail all original documents. The entire service process is transparent, allowing customers to view payment details and key milestones online.

With the rise of internet companies and the booming popularity of O2O services, platform-based enterprises and on-demand service providers have been increasing in number. In response, 51 Shebao has timely launched an innovative service called “Yonggong Bao” (Employment Insurance). Zhang Yi, co-founder of the company, stated that there are currently many online consultation or patient triage platform companies in the mobile healthcare sector that need to hire part-time physicians. As a result, de facto labor relationships are formed between these physicians and the companies. Should disputes arise, such companies would generally find it difficult to evade liability.

Furthermore, with policies encouraging physicians to practice at multiple locations, some startup ventures promote the model of doctors utilizing their spare capacity to provide consultations at other medical institutions during their off-hours. In this process, surgical complications or traffic accidents may occur. Similarly, for on-demand service platforms—such as those offering wellness massage or manicure services—part-time technicians employed by these companies may also meet with accidents while traveling to clients’ homes. Even a single incident can have severe repercussions for an internet-based startup.

In response, 51 Shebao’s solution is to partner with third-party companies to establish legally compliant part-time labor service relationships for all freelance personnel, including doctors and technicians, thereby separating labor risks from the primary platform. “From managing social insurance for internal employees to disbursing wages for part-time staff, 51 Shebao provides a comprehensive, end-to-end service suite that enables enterprises to fully avoid all legal risks associated with startups,” Zhang Yi told VCBeat. Currently, healthcare startups such as Yihu Doctor, Zise Medical, and Rongmeme have all become valued clients of 51 Shebao.

51 Shebao's User Wall

“Freedom Protect” is designed for freelancers or individuals who are unable to maintain social insurance coverage during job transitions. As is well known, in cities like Beijing, local residents without continuous social insurance contributions face barriers to purchasing homes and cars, enrolling their children in schools, obtaining credit loans, and accessing basic medical insurance. The goal of “Freedom Protect” is to ensure clients not only enjoy flexibility in their career choices but also maintain uninterrupted insurance coverage.

In addition, 51 Shebao has disrupted the traditional compensation structure based on the standard “five social insurances and one housing fund” by introducing a supplementary medical insurance plan that expands coverage from five to seven insurances. Essentially a commercial insurance product, this offering enhances companies’ competitiveness in attracting top talent. The supplementary medical insurance is available in various tiers, catering to employees at all levels, from entry-level staff to senior executives. Taking Beijing as an example, the deductible for basic medical insurance reimbursement is RMB 1,800, with only 70% of expenses above this threshold typically covered. However, if a company subscribes to the “Ziyou Bao” (Freedom Protect) package at RMB 99.9 per month, employees can enjoy a 90% reimbursement rate, with full coverage for medical expenses below the RMB 1,800 deductible.

In fact, 51 Shebao offers its own employees two insurance plans priced at RMB 99.9 and RMB 139, respectively. “Commercial health insurance should become a standard offering for internet companies in the future. A monthly premium of RMB 100 paid by the employer is not a significant amount—equivalent to the cost of a single meal—but if it enables employees to access nearly free medical care, it undoubtedly constitutes a more practical benefit,” explained Zhang Yi. Moreover, the supplementary medical insurance innovatively includes flight accident coverage, saving companies RMB 20 per employee per trip on flight insurance premiums for those with frequent business travel.

Disruption 2: Fees drop from 1,000 to 100, while maintaining a 30% profit margin

Compared with traditional third-party social security agency providers, whose service fees can easily reach thousands of yuan per person, 51 Shebao’s pricing is arguably the lowest in the industry. Even so, Zhang Yi candidly admits that all of 51 Shebao’s products remain profitable, maintaining a profit margin of around 30%, and the company is expected to achieve monthly break-even by the middle to late part of next year. “Our prices are three to five times lower than those of traditional services, yet our efficiency is actually six to ten times higher. This is due to our highly efficient system, which ensures a steady workflow without monthly peak periods, allowing for consistent service capacity,” Zhang explained.

Looking back to the early days of the company, our small team of a dozen employees provided indirect services to clients outside Beijing through local social insurance agents. After implementing this model for some time, we identified numerous issues. First, feedback from the agents was often delayed; for instance, if social insurance contributions failed to be submitted in a given month, we would typically not be notified until the end of the following month, resulting in delayed payments. Furthermore, the involvement of secondary agents led to poor communication with local social insurance bureaus and made public relations efforts more challenging.

In addition, traditional services adhere to an unwritten rule: for employees resigning after the 15th of the month, social insurance contributions are covered by their former employer, while those resigning before the 15th are covered by their new employer. However, in reality, resignations often occur unpredictably. If the two employers shift responsibility onto each other, it can result in a gap in social insurance coverage, thereby compromising the employee’s benefits.

However, 51 Shebao enables on-demand reporting and real-time contributions. With the company now having grown to over 200 employees, including 40 service staff in Beijing alone, and offline direct-operated branches established in 29 cities across China, such as Shenzhen, Guangzhou, and Shanghai, intermediaries are no longer needed. Instead, its own service team provides offline support directly to corporate clients. Should any issues arise during local social security processing—for instance, if an employee unknowingly wears a white top against regulations requiring non-white attire for ID photos—51 Shebao will immediately notify the employee and arrange either a resubmission of the photo or edit the image to adjust the clothing color. This ensures prompt resolution of the issue and uninterrupted social security contributions for the employee.

51shebao’s fully automated, one-stop management is another distinctive feature, pioneered through its unique SSC-SHOP centralized distribution model. The online social insurance service platform automatically breaks down corporate clients’ needs into multiple stages, each managed by a dedicated specialist. Specifically, each customer service representative handles the same type of service for multiple companies—for example, specialists responsible for new enrollments, and agents handling employee additions/removals or out-of-region registrations. These representatives collaborate seamlessly to serve each corporate client. Thus, every corporate user is supported by an entire team rather than by an isolated individual.

This stands in stark contrast to the traditional one-to-many business model. In conventional systems, a single customer service representative handles multiple enterprise accounts, with each representative’s role being largely irreplaceable. If such an employee resigns, other staff members are often unfamiliar with the departing employee’s client portfolios, leaving enterprises vulnerable to service disruptions or falling into a “handover black hole.”

Meanwhile, 51 Shebao’s online platform has eliminated the outdated practice of exchanging Excel spreadsheets among customer service representatives. All data is stored in the cloud, and through specific plugins, it can be directly imported into the Social Security Bureau’s system, replacing manual entry. This enables seamless automatic data integration across departments, significantly improving work efficiency and accuracy.

According to Zhang Yi, UK Hub, which has recently secured three patents, is one such plug-in. The UK is a data storage device provided to small branch offices that pay social insurance premiums. UK Hub integrates all UK devices into a single machine, which automatically performs on-screen clicks via internal LAN authentication to intelligently log in to the cloud-based backend, thereby facilitating the inquiry of information for different small accounts.

Disruption 3: Social Security Experts and Internet Product Managers Build 51 Shebao, Valued at RMB 120 Million

Although Zhang Yi, with his fashionable attire and ear studs, seems to have little in common with the stereotypical image of rigid and dull social security services, few would expect that this trendsetter graduated from the Department of Preventive Medicine at Capital Medical University. Before joining 51 Shebao, he served as Senior Product Director at group-buying websites such as Lashou.com and Didatuan, demonstrating a profound understanding of enterprise user needs and sharp analytical skills in dissecting those requirements.

51 Shebao Zhang Yi

Yu Qingquan, the founder of 51 Shebao, is an expert in optimizing social insurance, labor employment, and labor costs, with years of human resources experience in central state-owned enterprises and the IT industry. The SSC (Shared Services Center) model of 51 Shebao originated from his idea. In fact, Yu Qingquan once worked as a social insurance specialist at a company. During his work, he found that the content on the official social insurance and housing fund websites was unclear, making it difficult to locate necessary materials. Many procedures required multiple visits to local social insurance bureaus to fully understand. This led him to establish a social insurance forum for HR professionals to exchange experiences, which is now known as the 51 Shebao Forum. Today, the forum has become the premier learning platform for 200,000 HR professionals across China, where posting inquiries and reviewing featured threads have become essential daily practices.

From the forum’s inception in 2007 until 2014, Yu Qingquan decided to disrupt the traditional social security industry with an internet-based model. At that point, he reached out to his childhood friend and former classmate, Hu Wanjun. At the time, Hu Wanjun had previously served as ERP Manager at Lashou.com, specializing in data management and working as an enterprise informatization project manager. Later, Hu Wanjun brought in his former colleague Zhang Yi. Driven by their passion for the social security sector and their positive outlook on its prospects, the three resolutely committed to this venture, ultimately giving rise to what is now known as 51 Shebao Wang.

To date, 51 Shebao has secured two rounds of financing. The first was an angel round in August last year, raising several million RMB from Wang Xiao of Jihe Venture Capital and Wu Shichun of Plum Ventures. In March this year, the company closed its Series A round, raising tens of millions of RMB from CBC Capital, Jihe Venture Capital, and Shanghai Yongxuan Lianchuang Investment, bringing its valuation to RMB 120 million. Looking ahead, 51 Shebao plans to rapidly expand its business across China, targeting operations in 44 cities and growing its workforce to 300–400 employees.

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