O2O: WHY CHINA LEADS THE “ONLINE TO OFFLINE” REVOLUTION

O2O has been one of the main buzzwords discussed at GMIC’s Beijing conference. It is China’s leading mobile event with 20,000 attendees and a platform for all Chinese technology giants to announce innovation.

Some call it “Tech in Asia” and other “Techcrunch”.

If o2o is so obvious in China as a concept, it is also because there, technology and search for convenience have become a big phenomenon, with local success stories.

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For quick definitions, one might say that o2o is a digital thing that allows people to shop offline in real-life stores. Western famous o2o startups include Groupon, OpenTable, Uber, etc.

This is very important because e-commerce is still a small percentage of all retail operations worldwide, with countries ranging from 1% to 15% in the US, UK, China and India.

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QR code as a natural link for online and offline interaction
Some technological trends explain the rise of the Chinese o2o concept.

The first is the number of people on mobile, mobile internet and more powerful mobile internet connections. Of the 555 million mobile users in China, 1.62 million have used 4G, and this number is expected to reach 250 million by the end of 2015.

Technology is also important. If West’s early adopters were keen to simulate QR codes, then the Chinese – and the QR scanners embedded in WeChat, the country’s largest messaging app – would use them extensively. Starting in October 2013, an old statistic calculated more than 113 million scans (Adage) in a month.

In GMIC Beijing, 60-70% of Chinese participants rushed to their spokespersons by scanning their QR codes on WeChat, and they directly connected them as friends in the messaging app.

With Alibaba’s investment in Visualead (WSJ), the QR code has recently been validated in China, an Israeli startup that offers custom QR codes, which has increased the scan rate by four. According to them, China is two years longer than the rest of the world on this particular channel – often avoided by early adopters in the West.

Voice and instant messaging based app to increase trust, choice and end of trade
Voice-based applications are another feature that increases online trust and service levels before offline purchases.

Ronglian Yuntongxun is a software provider that works with multiple industries. For example, their voice-based platform helps doctors and patients conduct first pre-sales chats, increasing trust and possible end to transactions.

Another industry is the auto retailer, which offers potential customers of private chats to get closer to the deal, rather than purely screen-based interaction.

The service currently has 6,000 customers and has completed 2 rounds of financing.

Mobile Payment: The last small part of O2O’s successful implementation in China
Therefore, mobile payment is the third and final level of this o2o rocket.

Bank of America and financial technology startups are slow to implement mobile payments (through non-user friendly processes and reducing transactions), which has been led by e-commerce companies in China.

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So, from social commerce to messaging applications, a more innovative payment method is set up (you can freely send money to anyone on Weibo, but paying for mobile phones anywhere in the US is still a painful thing. ). Online payments have not been cut or reduced.

Convenience in the corner: O2O leads to better Chinese cities
In addition to pure technology, with the rise of local mobile commerce, it is also a convenient issue. In crowded, crowded cities, you are happy to spend hours buying basic things.

Startups like Dmall offer a very smart o2o service because they can turn nearby supermarkets in the inventory warehouse, which you can browse, order, and deliver within an hour of 2km.

Although Dmall is still in beta in a city (Beijing), it has received $100 million in funding, making it a record of seed funding.

Leyou is the largest omni-channel retailer of baby products, and uses scanning to give mothers and parents more information about products in the store.

By scanning the barcode, they can see the traceability of the product, buy it again, and keep it secret.

Traditional brands will also try their luck on o2o. One of them is Daimler, which experimented in Shenzhen, near a Tencent headquarters, a car rental and car sharing program. Users can browse the car or truck they want to rent on the app and then unlock it via their smartphone.

O2O checklist: design, design and design again
With all of these examples in mind, as well as the growth of China Mobile subscribers, it is clear that the leading edge of local companies will continue.

What should you do? Ok, here are a few steps to help:

Act as a platform, not a brand. Dmall turned the supermarket into a warehouse. The Chinese restaurant booking app Dianping is just a center for better browsing of existing information. They are now worth more than $5 billion (Wall Street Journal).
Betting design: You can access a lot of information, whether it is SKU (Leyou), available car (Daimler) or thousands of nearby products (Dmall). The interface must be clean and tidy.
The o2o feature can help: complete transactions online through instant messaging (WeChat is heavily used by brands for one-to-one communication) and mobile payments.
Ensure that the offline end of the business is 100% smooth and available. There is no more epic failure than online browsing and buying to achieve offline, the most important part is missing or broken. Train your staff and provide goods.

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