O2O case of six major replication failures in China

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O2O concept since November 2010 has been introduced into China by the parties quickly fry hot, a variety of classified information sites, reviews categories of sites, group purchase sites, such as booking sites have started to declare their own O2O mode. O2O's most basic explanation is to use the line to guide the flow of the offline experience and consumption, in this broad sense, the above mentioned site types belong to the O2O scope. Like many internet models, O2O is also from the United States, the most typical domestic entrepreneur is to see the United States O2O projects, and then quickly copied them to China. Of course, not all of the O2O projects in the United States are suitable for development in China, the quality of road consultation has been a few in the domestic replication failure or unsuccessful O2O cases for reference.

I. Classified information/Classified ads

First of all, the use of failure to describe the pattern of classified information in China may not be accurate, because the current domestic several major classified information sites still live relatively good, at least not the risk of failure in the short term, but said the classification information model in China has not been replicated successfully, so should not disagree. The originator of the United States online classification information website Craigslist was officially launched in 1999, and in 2005 China's People's Network (formerly known as guests), net and 58 have been established with the city. and Craigslist adhere to the light operation is different, under the urging of the domestic peer simply to make classified information more and more heavy, huge market investment and large-scale team make domestic classified information website seriously beyond the income, due to performance generally, in the short term of the site is not listed opportunities, Whether 58 the city or the net are tenacious but bitter forced to live.

Product path analysis: Craigslist produced in the search engine before the popular, for netizens to provide a search for local life service information convenient platform, and the United States, relatively mature integrity system, Craigslist focus on building community culture to carry forward the user's sense of ownership, the quality of information in the control to do a good job. And the domestic three categories of information Web site from the beginning was the pursuit of capital, the simple model more do the heavier, the pursuit of benefits at the same time inevitably make the information quality is not protected; Website traffic relies heavily on market input, and the flow of the value is not high, the future development prospects are doubtful.

Ii. Online Restaurant Reservation

Booking a restaurant online is a real requirement in both the United States and China. American Restaurant Reservation Enterprise OpenTable was founded in 1998, successfully listed in Nasdaq in MAY 2009, OpenTable revenue in 2012 exceeded 160 million U.S. dollars, currently (May 22, 2013) market capitalisation of more than 1.5 billion U.S. dollars. and domestic restaurant booking enterprise inside, was established in 2003 of the Rice network and set up in 2004 the most representative of the meal, but the current development situation are not very ideal, both corporate revenue and Web site traffic growth has stalled, began to slowly fade from public view. In the long run, there is also a slim chance that China will have an independent public restaurant booking business.

Product Path Analysis: Restaurant booking in China is not a strong demand, the number of Chinese restaurants, users do not have a strong booking habits; even if a reservation is needed, Chinese users are more likely to do so over the phone rather than the Internet. OpenTable is an online reservation site, but its core competitiveness is that it has a more advanced booking system, and most of China's restaurants to pay the SaaS subscription software is less acceptable (can refer to the article "Chinese Food O2O why not OpenTable?").

Third, online group purchase

Founded in November 2008, the originator of Groupon in the United States to achieve initial success, the model was quickly copied to China in early 2010, thousands of group buying sites have been set up in a year, by the beginning of 2011 group buying industry has become the Red Sea market, The crazy advertising war and price war make Chinese group buying industry overall gross profit rate reduced to less than 5%, 2011 the second half of the year after the capital market cooling, the original expected to market the handle nets and litters regiment have broken. Since 2012, group purchase has gradually returned to the rational, after the fittest left a handful of several group buy site overall development is not bad, but no matter from all aspects is still very bitter force (please refer to the article "from the glutinous rice net report to see China group buy industry Status quo"). Although not a complete failure, but in the short term Chinese group buying industry to appear independent listed companies have little chance.

Product Path Analysis: Group buying mode itself has a certain disadvantage, it is difficult to make the site, consumers and merchants to achieve a win-win situation between the three parties, and the Chinese group buying market because of fierce competition, the major group buying sites often take a price war rather than service war to rob the market, this mission to buy the industry's negative And Groupon's share of more than 40% compared to the domestic group buying industry, the overall proportion of less than 10%, the profit-making field of the phenomenon is very prominent, difficult development prospects.

Four, online short rent

U.S. online short-term rental website Airbnb since its inception in August 2008 has been very rapid development, as of October 2012 Airbnb won a total of more than 300 million U.S. dollars of financing, valuation between 20 to 3 billion U.S. dollars. China's domestic short rent is 2011, this year love the day rent, ants short rent, travel the world, passers-by and other short-term rental sites are online. From the classification, the current love day rent, ant short rent for Consumer-to-consumer mode, and Airbnb mode is similar, and the pedestrian network belongs to the model, for tourism vacation to do house trusteeship. Although the short-term rental sites have been merged into the capital, but the development is not very smooth. In May 2013, Love day rent first broke a big job cut 80% of news, from the current point of view, at least consumer-to-consumer model of short-term rent in China's development prospects are questioned.

Product Path Analysis: First of all, the domestic integrity system is imperfect, the trust between strangers is lower, the owner is difficult to trust their house to the short rental households. In order to increase the availability of consumer-to-consumer, short rental sites have to find listings through intermediaries, but this will reduce the user's experience. Second, the current short-term rent this form in the law is a gray zone, there is a greater policy risk, and as a pedestrian network of the business model itself and the hotel approach, it is not easy to win in the fierce market competition. New York City recently ruled that Airbnb's business was illegal in New York, and that domestic peers faced the same potential risk.

V. Location Shopping

American position Shopping application Shopkick was founded in June 2009, August 2010 on-line the first mobile application, the application is based on the current position, the core is the real sign in, its independent development of the hardware identification system shopkick signal can achieve accurate indoor positioning, Customers can get points when they enter the store, and they may exchange goods or offers directly from merchants online. Unlike Foursquare, Shopkick does not focus on socializing, but is committed to promoting value transfer between online and offline, business and customer. Shopkick is welcomed by consumers and businesses in the United States, and has been in the two round of 20 million dollars in investment. At present, domestic and Shopkick similar applications are shopping, but not as fast as the U.S. counterparts to develop.

Product Path Analysis: Shopkick mode in China more difficult to replicate, first of all, shopkick technology development cycle long, high research and development costs, it takes a long time and input. Second, the equipment installation cost and maintenance cost is high, in order to realize the real check-in, the Shopkick needs to install the equipment in each merchant's shop. Finally, shopkick such pattern needs the mature market support, and obtains the double approbation which the merchant and the consumer, the domestic can promote the city to be more limited.

VI. Catering Social

The American catering social networking site, GrubWithUs, was founded in August 2010 and received a 1.6 million dollar angel investment in May 2011, with a 5 million dollar a round of financing in May 2012. GrubWithUs to bring strangers together, let them enjoy the food in the restaurant, and help them make new friends. Gurbwithus according to the preset price with the merchant to negotiate the seat, the menu and the bill, the meal average cost of the bill, GrubWithUs will increase the meal fee based on 20% of the tip, as a commission for organizing activities. GrubWithUs is currently operating mainly in Chicago, Los Angeles, New York and San Francisco, where the number of users has grown significantly. GrubWithUs's apprentice in China includes 24 tables, a patchwork network, a high net, a patchwork network, etc., but has now ceased operation or stopped updating.

Product Path Analysis: GrubWithUs is based on catering group purchase, in order to provide users with food and beverage information, the site needs a large number of sales staff online with the merchant to discuss cooperation, the model is heavier; second, foreign users in the use of GrubWithUs more social rather than restaurant discounts, but in the domestic consumer price more sensitive , this also makes the group buying attributes in the site accounted for more than friends.

In addition to the above six O2O cases, there are quite a number of projects in China are learned from abroad, but most of the "duplication" is not successful, do not consider China's national conditions, simply copied the model is the main cause of failure, the apprentices took an inappropriate development strategy, often eager to find the important reason for failure. For Chinese O2O entrepreneurs, to give up blindly foreign worship, focus more attention on China's vast local business market, while abandoning all-inclusive thinking, as long as in a subdivision of the field or geographical plowing, the achievement of a "small and beautiful" cause is very often opportunity.