The Bubble Has Burst for the Online-to-Offline Industry in China

Article The Bubble Has Burst for the Online-to-Offline Industry in China

Baidu, Alibaba, and Tencent Are Picking Up The Broken Pieces

Ifanr,

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Online-to-offline (O2O) describes businesses that use online platforms to enhance the experience of offline services. O2O is a generic term with wide application, but in China it usually refers to at-home services that you order online. Cosmeticians, chefs, pet groomers and even teachers will show up on demand at your doorstep.  Senior editor Li Shuaifei of the tech media site Ifanr reviews the developmental arc of O2O services, from being the latest craze among investors to the hot potato no one wants to touch today. getAbstract recommends this article to venture capitalists, entrepreneurs and economists.

Summary

Back in 2015, start-ups with online-to-offline (O2O) business models were all the rage in China. Taken together, venture capital funds invested nearly ¥30 billion yuan [$4.41 billion] in O2O companies that year. But by the second half of 2015, the slowdown of China’s economic growth reined in investment in nearly all industries. By 2016, O2O companies were falling like dominos. In early 2017, e-commerce giant JD.com put a stop to its on-demand in-home services,  which included home cleaning, laundry, massage and beauty treatments. Life-services platform Dianping shut down all O2O operations except home cleaning and moved even that from its homepage to a second-level page. An incomplete tally of O2O service providers that closed shop in 2016 lists 12 companies in the food industry, 12...

About the Author

Li Shuaifei is a senior editor for Ifanr, a media website that provides news and analysis of technological innovations, services and trends.


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