O2O and Major Models/Players in China
- Catégorie(s) :Press release
- Auteur :KT Wu
- Source :Hanshow Retail Academy
- Visites :
O2O and Major Models/Players in China
As one of the main practices of new retail era here in China, O2O has become more and more important for retailers and brands especially during the pandemic. The market size of O2O related business will reach 3000 billion RMB by the end of 2020. It is expected that this year's fresh food, fast-moving consumer goods and pharmaceutical products sales will grow rapidly, at least doubling the size.
Business formats covered by O2O are constantly evolving. At present, there are three major O2O business models in China: platform model, online and offline model and retailer-operated model.
Platform model is the business where online platforms cooperate with offline businesses to provide products or services to consumers, with a fee. Platform models account for about 77% of the O2O market in China.
Alibaba Local Life Service
In October 2018, Alibaba Group announced the establishment of Alibaba's Local Life Service group. The mission is to "Redefine Urban Life for a Better Living." Koubei (口碑) and Ele.me（饿了么）are in the group. Koubei focuses on attracting online customers to offline stores. While Ele.me focuses on helping offline businesses expand through online channels and providing delivery services.
Ele.me is mainly engaged in food delivery from online orders, and has expanded to other categories including OTC (over-the-counter) medicine, etc. It provides delivery as fast as 30 minutes and uses innovative technologies to promote the digitalization of catering industry.
From: Ele.me App & Koubei app
Koubei enhances customer experience of local life services with the help of the internet, data, and online reviews. Users can look up business information and obtain coupons on Koubei App, and then enjoy services in the store.
Started as a city living guide site, Meituan Dianping now provides one-stop services for eating, drinking, traveling, shopping, and entertainment. At present, its strategy focuses on Food + Platform. With "eating" as the core, it is building a multi-level technology platform providing city life related services.
From Meituan App & Dianping App & Dmall App
Using the Dmall App, consumers can place orders online, and the purchased items will be delivered from the Dmall partner supermarkets in their area. Consumers can also choose to pick up the goods at the stores. On the one hand, Dmall complements the delivery service for the stores and meets the consumers’ need for convenience. On the other hand, the multichannel store operation increases efficiency and optimizes the business model.
Online and Offline Model
Online and offline models account for 14% of O2O market, winning the place through innovative retail stores empowered by technology. Offline stores of this Online and Offline Model are used as places for better shopping experience and dining-in.
Freshippo’s innovative "O2O-LBS" (Location Based Service) business model focuses on the integration of online and offline scenarios. Offline stores are also used as warehouses. Shoppers can use Freshippo App to place orders online.
Freshippo meets customers’ needs on four levels: more choices (covering daily high-frequency consumer products), fast delivery (delivering store dishes or grocery ordered online in 30 minutes), high quality (high-end seafood, fresh fruits and vegetables), saving money (prices of seafood dishes are generally lower than those of restaurants, and delivered free).
In order to ensure the freshness of the products, Freshippo purchases products directly from the source. Freshippo uses its self-built logistics team for delivery. When the order volume is too large, it will use the third-party distribution platform as well. So Freshippo can carry the load of online orders more flexibly and ensure the delivery speed of online orders.
Fish labeled with a QR code indicating products’ origins Hanging transport racks in Freshippo store to speed up picking and deliver
From: https://nanhaitoday.com/nhxww/articles/2019/10/31/f9555a14ea8843d9988a19904da05591.html From: http://newssq.cn/forum.php?mod=viewthread&tid=161
7Fresh is to create an online and offline fresh food supermarket. Products can be ordered online, delivered home or picked up at stores. In terms of distribution, 7fresh relies on the advantages of JD in logistics, providing a 30-minute delivery from stores for online shoppers within 3 kilometers.
Some 7Fresh stores also feature “Magic Mirrors”, which can provide product information on a screen when they sense that customers have picked up fresh produce.
Traditional retailers have developed self-operated O2O App or WeChat Mini Programs to promote online business. This business model takes up a market share of 9%.
Suning was originally one of the major home appliances chain stores. In 2014, Suning.com, an online shopping channel, was officially established. At present, on top of Suning stores, Suning Group has online channels such as Suning.com and Suning flagship stores on Tmall, and offline channels such as Suning Small Format(苏宁小店). Its business scope has expanded from comprehensive home appliances to daily necessities, fresh food and other categories.
Suning Small Format
In 2018, Walmart entered the JD Daojia (京东到家）platform and provided one-hour delivery for online customers. As an investor, Walmart also integrated user data, store data and warehouse data with JD.com. Both companies now introduce users to each other's platforms, and Walmart stores also serve as JD.com’s warehouse/fulfillment center now. Back-end systems of the two companies are now linked.
Due to the pandemic, from January to April 2020, the sales of Walmart fresh food on JD Daojia’s platforms increased nearly three folds year-on-year. The most significant increased categories include pork, eggs, vegetables, fruits, etc. Now, Walmart also provides private brand fresh products that can be traced throughout the entire process from planting to fertilization, harvesting and processing.
Traceable packaged vegetables in Walmart
With both online and offline sides of business constantly evolving and integrating, plus the empowerment by the advancement of technology, we can certainly expect more exciting scenarios in the retail landscape in China.
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