O2O Business Model the Future of Retail


E-commerce has grown internationally over the past few years; China is one of the countries with the fastest e-commerce growing market. Despite the success, return rates have also grown accordingly. The lack of buyer experience is perhaps the biggest weakness of e-commerce, that is the main reason why the online to offline (O2O) business strategy was created.

O2O Business Model in China

Online-to-offline (O2O) is a business strategy that brings potential customers using online channels to physical stores. In fact, O2O Commerce is a business modus operandi that uses the IoT and mobile systems to drive offline local sales. For a quick definition, one might say o2o is anything digital that brings people to shop offline, in real-world stores.


The Growing Popularity of O2O Business Model

it is interesting to note that despite its popularity “just online” does not cut it with Chinese consumers as 51% of prosumers are against the survival of online retailers only. O2O commerce has grown rapidly in China. This is the most important development in China. You absolutely have to watch your data on sales online to influence offline sales. In China especially, O2O also covers all manner of services that might not be cost-effective to offer in Western markets, including pick-up dry cleaning, home haircuts, or wholesale and fresh market delivery services. For a simpler meaning, the O2O business model is anything digital that brings people to shop offline.

The concept of O2O is nothing new; marketers have been talking about this for a number of years now. At its simplest level, O2O uses online content to drive customers to physical stores. Premier Chinese internet companies making major investments in physical stores and distribution networks, providing the convenience of e-commerce with the instant gratification of brick-and-mortar shopping.

China’s tech giants such as Alibaba, Tencent, Baidu, etc. have backed up this O2O vision with a range of investments, with Alibaba arguably leading the way through a shopping spree of its own. The success of the O2O business model attracting foreign as well as Chinese investors. The combination of O2O brings the best of both worlds together. In this model, the business treats both channels- online and offline as complementary in terms of increasing sales rather than competitive.

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