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Overload O2O, be a coupon bubble?

Now, China's entrepreneurial market hot anomaly - probably all agree that. In just the past few weeks, for example, for example, baidu CEO robin li said that investors are desperate to Chinese startup money and feel they are stationed outside the building in baidu, tempted baidu staff to start a business.

Jingdong CEO liu China BBS told attendees at harvard business now how much heat: "you only need an idea, you can get $30 million."

But China has appeared before the business boom. Does this mean that the investors could get burned?

Look at the past, the development of bulk thermal history

In 2010, China's Internet industry with a new trend: the websites.

Although the company in 2008 in the United States, but China and coupon interest is not only the east again, copy the western: from BBS BBS to produce naturally, where the user will unite of thrift in order to discount shopping together. In view of the mechanism can be applied to a larger scope, so there are a few Chinese entrepreneurs set up daily group.

They started early, rapidly, by 2011, China's early group has to a huge investment for yourself. Shake handshandle net is one of the early industry leader, launch in March 2010, to April 2011, it has raised more than $170 million in the three rounds of financing. Thousands of companies took a fancy to this huge cash flow, and take the opportunity to want to share a piece of fat meat to eat. As of September 2011, a total of more than 5000 group-buying startup companies in China, although few people make money.

But nothing is too much, China group purchase industry suffered a high fall heavy twist. Small entrepreneurial firms began to close, like shake handshandle nets, 55 group, 24 stamps and President was forced to a large number of layoffs to offset losses.

In November, nearly 1500 group-buying startup website shut down. In early 2012, the number soared to more than 2000, to August 12 years, and there are more than 3000 group-buying turned off. Although there are some local winners, but the other players are not forced to blend in other big companies, is toward the end of the collapse.

Overload of O2O, foam or opportunity?

Now China's start-up companies in almost all fields of science and technology are experiencing a boom. What is undeniable is that the recent O2O startups as have appeared, and also constantly from the hands of investors access to funds. In the past one month, we have seen the flocking to China startup capital to promote a new round of prosperity, auto repair, door to door massage, tickets, food and beverage service, delivery, and online education, and other fields have a lot of O2O products.

Of course this is only a part of this month, also is only a small fraction of all O2O entrepreneurial companies. O2O business boom in China's high-tech industry development of brewing over the years, fermentation, thank all the high-profile investment out of the bubble began to emerge, but now it will only attract more capital into the industry.

"In the last 48 hours, I just threw a" eyebrows dyeing and finalize the design "O2O services and a" let the nurse to go to the hospital with you "O2O service partner of 500 Startups, investment farce told me with a smile. Other investors also said the same thing: O2O army" savage ".

O2O boom in China, if not more than 2010 to 2011 group-buying tide heat, and also at that time. If O2O reflects in group-buying industry happened, that the industry may soon go to the fall of 2011, then everything turned down, a few months there are thousands of startups fail.

History will repeat itself? Not necessarily

Thankfully, investors believe that China's current O2O boom and has led to thousands of entrepreneurs "cliff" group buying boom are quite different. Infinity Ventures Tian Zhongzhang male said, "in group-buying is everybody doing the same thing, the main services are undifferentiated. However, in the current boom O2O, startups is to solve the problems in different areas. There is competition between each domain, but this and everyone do the same thing is very different."

In other words, when a O2O food distribution company and a O2O education service companies share the same basic business model, even service in the same area, they will not compete directly. To different O2O company for different customers, but the websites tend to provide the same service, restaurant coupons, discount tickets, etc, which makes them in the same market directly compete with similar sites.

Of course, in the field of the hottest O2O or there is a fierce competition. Such as on-demand services in the field of food delivery competition has been very serious. Major competitors including the regiment and hungry? Are all melt in recent round of large sums of money. Also have like call chickens and guest as smaller startups are under development, and attract investment.

But even so, O2O areas also far far more than the bulk.

In addition, some investors see the group-buying and on-demand service fundamental difference about the feasibility of economy in China. Chinaccelerator, head of SOS Ventures partners explained that group-buying "has not let" the necessity of the vast majority of merchants and their cooperation.

Group cooperation, in order to attract customers, they must provide substantial discounts, many merchants eventually could not bear. In the absence of local partners, group-buying bankruptcy quickly. But, in contrast, O2O service without merchants offer discounts that they just take merchants to users.

Essentially, William Bao Bean said O2O is traditional entity enterprise for marketing and stylish new word... As a whole is advertising.

Melvillo also think O2O differs from that of group purchase hot, she pointed out that another important reason: O2O barriers to entry are very low and very easy to implement. "It is basically a market + trading model, none of the business model, which is a kind of easy to understand and practice." She said: "don't involve too many technical problems, the unit economic benefit is more easy to calculate."

And obviously, it is not only not prime minister li keqiang, puts forward the strategy of "Internet +" resistance, can also help to use the Internet to revive the traditional industry.

Industry reshuffle, future?

Therefore, the current O2O explosive growth and wreck a hammering group-buying boom is different, after all, where these companies are so similar. However, consolidation, as well as a large number of startups fail - is still on-demand service industry in China is inevitable. And if you don't have to enter the game, now the incoming again and then it was too late.

GGV capital managing partner who said, although there are still many O2O companies seek GGV capital investment, but some of the major (O2O) in the field of pattern has been a regular basic. For example, he noted that the online takeout areas almost no new startups can it compete with hungry.

Although in the long run, O2O industry across the areas of consolidation is inevitable, who said that he did not consider O2O industries will be the winner of the lot. O2O every major category - like delivery, education, etc. - will have a team champion in the future, this is decided by the idea of best. In a niche category winners may be absorb the other winners.

However, although the group-buying industry in a few years he saw clear winners, tung said, he thought at the battle of O2O may take longer. O2O need, according to what he said, is "more execution", this is because in many suppliers and place between the difficulty of standardized services. This means that the final winner takes much longer to emerge.

And, despite the race for O2O major categories of their other battle may be left out of a large number of losers, but the end result should be good for everyone. TongShiHao argues that successful O2O platform will contribute to local economic development, improve the economic efficiency, and ultimately promote the development of service-oriented businesses of more capable. This is another story, their main effect is convenient for consumers.

So, while China's on-demand service market is heating up, but don't be afraid. Many start-up O2O company will fail, but compared to have happened in the group purchase industry of the great depression, the O2O boom "recession" won't come so suddenly and violently.