O2O practitioners are still too simple to know about closed-loop issues

April 2013, many media have reprinted from the global Entrepreneur on an article: "Want to Do" Little Ma "Zhang Xuhao: O2O how closed loop."

Single look at the title, the author also thought "Little Ma" Got what the secret, solve the closed loop problem, read the disappointment, unavoidably regrets, O2O practitioners on the closed-loop problem understanding or too simple and superficial.

"Little Ma" in the article, it is written:

"All along, one of the focus issues in the" O2O "business model is how to achieve O2O's closed loop, in other words, now most of the O2O products only achieve half of the loop-line behavior will lead to the line down to the consumer experience, realize the transaction, but how the offline user behavior to the line, or a problem. "' Hungry ' already can pay online, also realize the closed loop." "This is the place where Zhang Xuhao is proud, through the" hungry "payment framework, the user can pay Alipay, the restaurant is also in this system to settle. ”

Users to pay online, the money to the platform, the platform after deducting the merchant's service charge to the merchant, doing well may also be like Jingdong can have 2 months of billing period, intercepted a large amount of cash flow in the hands, imagination and logic are pretty beautiful.

Just, realize the online payment, also realize the closed loop!? This conclusion is obviously too early, which is discussed and proved below.

Why is a closed loop important?

For all transactions of the Internet, especially O2O business and services, in order to achieve "credible transaction", closed-loop is necessary and essential. Whether it is a coupon or a group purchase, whether it is a restaurant booking or delivery, taxi or rent.

Simply put, you have to achieve business value, you must be able to prove that the transaction is your website or application brought to him, and users after consumption, but also to make the business can not deny, this is the "closed loop" in the trading link in the embodiment. The closed loop of the trading link emphasizes the service and consumption process of the information (order) and the confirmation of the result.

Another aspect of the "closed loop" is the payment link. The closed loop of the payment link emphasizes that the commercial value of the website should be logically realized (O2O business, as far as possible in the user to the merchant to pay the link to design, so as to obtain the corresponding cash return);

Otherwise, your deal is either "not credible" or a lack of return and profit patterns.

The traditional Electric Dealer (B2B,B2C) solves the transaction and the payment closed-loop method, it is difficult to use directly in the O2O business. Because most of the scenes of the former are "one wire, two computers attached, connected to two people in front of the computer", and O2O application of the actual scene is often very different, the other end may be "at the hotel's front desk, at the supermarket checkout, or in the flying taxi, also may be in the field, in the country need anywhere. "That is, the other end of the fundamental lack of network information standard environment, which also makes O2O business, only to reach the transaction information closed loop, is a very difficult thing."

It should be explained that in the last two years, many enterprises in the closed-loop solution and equipment have invested a lot of resources for development and research, but also the introduction of some Low-cost terminal products to solve this problem. For example, Tintin offers the Merchant verification machine, and some integrated POS solutions and special near-field payment equipment. But in this area, there are no killer products yet.

"We firmly believe that the closed loop in the O2O domain is the fundamental core of all business models and user value models in this field," Dai once said in a statement from < products home > Salon. Although we solved the problem of the closed loop locally, the whole O2O closed loop is still a distant matter. ”

I very much agree with this view. On the one hand, Chinese society is subject to the construction of infrastructure, on the other hand, the practitioners of the low-end service industry have their own cultural qualities, which makes the realization of O2O comprehensive closed-loop. In the west and even in Japan, the situation is completely different.

"From an infrastructure standpoint, Japan is one of the most suitable countries in the world to develop O2O industries," Forbes said in a previous article on the Chinese Internet. ”

"Japan's 3G network penetration rate has reached the 100%,4g of 10%, the mobile phone network signal is good, and half of the mobile phone users are not capped package user, do not worry about excessive traffic." Mobile near-field pay penetration rate of more than 40%. In addition, Japan's 7-11, the family, Rosen and other convenience stores are highly developed, drug store throughout the country, a variety of support for mobile phone vending machines everywhere. ”

This is the fertile soil in which O2O can exert his fists.

Catering takeout O2O, closed-loop challenges and obstacles

First look at the trading information closed loop. The lifecycle of a normal takeaway order: users in the site up and down the order, order information through the platform to the merchant, the platform to receive the confirmation of the merchant, the user needs to see their order from the platform of the status of the normal after the confirmation began to wait, the merchant delivery to the user's hands, meal to pay.

It looks like you can put a computer on the Internet in a store and everything will be all right.

But the previous article said, hungry? As well as other ordering site, the vinyl merchants, with computers and normal access to the Internet, the proportion of less than 1/8 (first-tier city), in the second-tier cities, this ratio is lower, in many small radii, there are computers and the number of Internet merchants sometimes even 0.

First of all, as a low-end takeaway restaurant owner, I do not want to put an Internet-capable computer in the store, especially when I often not in the shop, it will become a shop assistant entertainment game. More often than not, I don't even know what a computer is, let alone make me pay for the internet.

How does the website send the order to me in time? Yes, if later you give me the order water reaches 9000 yuan above, in your strong persuasion I can consider to buy a computer and the Internet, but I am not familiar with the operation of the computer, you have to help me buy, help me install, out of the problem to help me maintain. Cost, cost, I see is more and more cost! In my friend's restaurant, I did experience the process of text messaging to computer processing, but not all businesses have his knowledge and level.

Let's take a look at how these sites achieve "trading information closed-loop".

The first use of the network is the call center mode, and Shanghai's 129T ("a press on the" homophonic) site, and then developed a business order processing system. Said earlier, this merchant group of more than 80% are not computer, so rely on the merchant's "Order Processing system" basically can not change the overall situation.

The call center's seating charges and telephone charges are apportioned to each order, the cost is about 2-3 times the profit of a single order, the more orders, the more losses, so the model is inevitable (the network of the Micro-blog has published a picture, the title is, "Look at our printed bill of fare", The length of the bill can be printed around Beijing.

About the meal network to achieve order information so-called "closed-loop" way, and a meal in cooperation with the merchant "Dragon Hidden Road" microblogging, also has a description.

This model can be used to get VCs and VC come in, it shows the business plan of the "foundation" and "Planning ability" admirable. This story can also give entrepreneurs another revelation, VC most of the time is more easy to be fooled, your story just on his taste on the line, you have to say that each order can get 20% of the profits of the domestic helpers, they sometimes really believe. However, for them, money is just a number, for you, it may be a few years of time and youth, just gave them a blocked proof.

Another way to achieve order information closed-loop is to rely on two-way channel SMS (my friend's restaurant at the beginning and the meal booking site to use the text), at present, this is in addition to computer processing, the three main platform to order a meal site processing orders adopted another important way. However, this way there will be about 30% of the message order because the channel or the business itself operation reasons, can not achieve normal issued or up to confirm the reply, and therefore the need for artificial customer service intervention in order to complete information closed loop.

If there are abnormal conditions (vegetables sold out, user reminders, return orders), the entire information closed loop will become more complex and difficult, resulting in the processing cost of orders directly rise.

The current platform of the order to sell the site, and there is no low-cost solution to the "order information closed-loop" approach, although from the order processing process, the family seems to have reached the information closed-loop, but the price is too big.

Many engaged in this industry, or want to engage in this industry, early did not fully recognize the difficulties and problems, although you may be the elite of the Internet industry, willing to "downgrade" to do this, but it is recommended that more than 50 restaurants in the field research and interviews, then decide whether to enter the business.

Payment of the closed loop?

"Little Ma" in the article mentioned, "Through the ' hungry" payment framework, users can pay Alipay, the restaurant is also in this system to settle. ”

Let's first analyze the proportion of online payments, hungry. More than 80% of the orders from college students, for a meal of 10-14 dollars of take-away, open net silver or Alipay to pay the proportion of online will not be higher than 3%, white-collar areas will not be higher than 5% (currently hungry for the foreign claims reached 10%); As far as I'm going to eat. , a lot of students are called takeout, one order contains many copies of the same dormitory, this scene how to pay online?

The proportion of online payments is so low, how does the restaurant settle in this system? (Description: Hungry?) The main site is still relying on artificial line to collect cash on the way, charge the service fee of the restaurant, in my opinion, to order a meal takeout site, currently doing online payment, completely unnecessary, pure waste of money. Because the payment module once on-line, only means that the technology development, the operation management cost will increase greatly, and cannot achieve "pays the closed loop" the original intention and the vision.

Outside the order network can not be like group buying site, through online payment to reach a closed loop, the main reason is because the customer unit price is too low so that the proportion of online payment order is very low.

All these, I have been pessimistic that the information closed-loop in the o2o of food and beverage can not be solved in 5-10 years, because China's low-end catering business may take 5-10 years or even longer, accompanied by China's economic and social changes, catering services to improve the level of evolution and development.

The backwardness and restriction of infrastructure construction is still the root of the pain of O2O closed loop.