Unlike most group buying ventures, O2O (Online to Offline) is working in China, says managing director William Bao Bean of the ChinaAccelerator in TechinAsia. “Group buying just did not make sense economically for most companies.”
Even so, though, the O2O sector is far more diverse than the group buying sector ever was.
Moreover, some investors see a fundamental difference between group buying and on-demand services when it comes to economic viability in China. Chinaccelerator director and SOS Ventures partner William Bao Bean explains that group buying “didn’t make economic sense for the vast majority of businesses using it.” In order to partner with group buying sites and attract customers, they had to offer steep discounts. Many ultimately couldn’t afford to, and without local partners, group buying sites went under fast. But O2O services, in contrast, don’t demand businesses offer discounts, they just bring them customers. In essence, William Bao Bean says, O2O is “a trendy new name for the age old practice of brick-and-mortar businesses marketing themselves […] in the end most of it is just advertising.”
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