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Connected Online: Overheating O2O, Be Carefully Falling into Business Pitfalls

In the past two years, O2O has become a hot topic for Internet companies to talk about repeatedly. The upsurge of O2O has attracted capital dance. Jingdong CEO Liu Qiang Dong once told the attendees at the Harvard China Forum how hot O2O entrepreneurship is today: "You only need one idea and you can get $30 million in funding.


At the moment, investors frequently turn their attention to O2O. Frequent attempts by Internet giants such as Tencent, Ali and Baidu have attracted a large number of entrepreneurs to join the O2O industry.


However, behind the rising financing volume and valuations, truly outstanding O2O projects are rare. According to the survey, most O2O companies have difficulty obtaining C-round financing. Tencent Technology has an article "Overheated O2O will become a business trap? "Generally speaking about the current entrepreneurial bubble in the O2O industry.


In the past year, the truly outstanding O2O projects are rare. The rushed O2O projects generally face serious homogeneity, insufficient resources under the line, and difficulty in securing the capital chain. O2O is overheated, and there is no way to find a profit.


The Internet-connected online team has experienced the “One Thousand Regiment Wars” that same as many startup companies. At that time, the domestic group-buying website was just like a financing game. Advertising overwhelmingly took over the market and entered the burning money cycle. The result was a vicious competition in the group buying industry and a quick reshuffle. When the competition reaches a certain degree, it will cause the bottom line to be missing and vicious competition. Profit cannot be guaranteed and the company will come to an end. Within a few months, thousands of startup companies collapsed and became a fierce past in the history of the Internet economy.


If O2O reflects the history of group purchase at that time, will the tragedy repeat itself?


Now that the relatively large platform has begun to burn money, the small platform is still brewing money. However, more people think that O2O is not the same as group buying.


Many investors believe that China’s current O2O boom is very different from the group buying boom that has caused thousands of entrepreneurs to “fall off cliffs”. In the group buying, everyone is doing the same thing, mainly undifferentiated services. However, in the current O2O market, startup companies are solving problems in different areas. There is competition between each field, but this is very different from everyone doing the same thing.


While the on-demand service market in China is heating up, the industry transformation has been basically completed. Many start-up O2O companies will face failures, but compared to the “Great Depression” that happened in the group-buying industry, this “Oubo period” of the O2O craze. It will not come suddenly and violently. The Connected Online team believes that there are still many opportunities for entrepreneurs to provide innovative O2O services, and the O2O transformation for enterprise services has only just begun.

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