Market Prospect and Financing Strategy of O2O Life Services in China 2016-2021

16:55 EDT 18 Oct 2016 | PR Newswire

LONDON, Oct. 18, 2016 /PRNewswire/ -- O2O refers in particular to the electric commerce trend of local service. Broadly speaking, O2O means attracting consumers from online platform to entity shops through online marketing, i.e. Online To Offline; or by offline marketing directing consumers from offline to online, i.e. Offline To Online. Online payment is not necessary for completing transactions through the whole procedure.

In a narrow sense, O2O refers to that consumers purchase and pay / reserve certain type of service / commodity online via online platform, and experience / consume in offline entity shop to finish transaction; or consumers will purchase and pay / reserve certain type of service / commodity online via scanning QR code / mobile terminal after offline experience to complete transaction. O2O in narrow sense stresses that transaction must be done through online payment or reservation, and the marketing effect of merchants are predictable and measurable.

The development trend of O2O in future depends on the control of scene. Two different development modes come into being when O2O life service develops into the control of consumption scene. One is platform-based integration mode, serving as the channel linking all consumption scenes. It is under the control of BAT, the three Internet giants who have traffic dominance while other manufacturers have difficulty getting involved. The other is the localized, intensified, deepened industry chain mode for vertical segments, for example, the scene control from laundry, cosmetology, and massage to on-site home service.

The market size of O2O local life service in China reached RMB 335.19 billion in 2015. From its emergence in 2010, penetration rate and market size of O2O have increased year by year after developing for several years. On one hand, it benefits from the popularity of Internet; on the other hand, the fast development of e-commerce makes contribution. Especially in 2013 and 2014, O2O mode was popular among capital market. For the most party they accelerated the growth rate of O2O market.

Life service industry has a direct relation to the basic necessities of life and the national policies of the growth stabilizing, domestic demand and employment promoting, and benefaction to people; Chinese life service industry develops fast with huge changes in recent years, emerging a large number of new industries and playing a more important role in the economic society, however, with a low permeability on the whole. In the past two years, there have been a large number of O2O platforms, greatly promoting the fast development of O2O market; Chinese local O2O life service market size amounts to RMB 335.19 billion in 2015, which is estimated to reach RMB 1.6 trillion in 2021.

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