External Response to “Why Online2Offline Commerce Is A Trillion Dollar Opportunity”
Online2offline (O2O) commerce is a new type of e-commerce as online marketing services. In post “Why Online2Offline Commerce Is A Trillion Dollar Opportunity”, Alex Rampell, the CEO and founder of TrialPay explicitly explains the potential and future value of O2O commerce.
Thinking about the company Zappos’s success with shoes mentioned in Comm101 class 19, it would give you a hint about the reason why Alibaba has invested $692 million and started working on their own O2O commerce since this early 2014, stated in article “Alibaba invests $692 million in Chinese department store operator”.
Strength:
The strength of O2O is customers making transactions online even though items shortage offline, yet, the purchased item will be delivered to the customers immediately.
Disruptive innovation:
Furthermore, those product suppliers’ profits increase dramatically as they save a lot of money by joining O2O commerce. For example, we suppose a sugar daddy is hooking up with a young lady, and he gives her $20000 every month as some sort of a compensation. Meanwhile, the young lady does the same thing to a charming man and she gives him $10000. Again, the charming man does the same thing and gives $5000 to a young girl. Eventually, the young girl finds out the truth and contacts the sugar daddy directly, she proposes to replace the young lady with an offer of $8000. In the end of the story, the sugar daddy accepts the offer from the young girl.
In this story, the sugar daddy is customers who saves $12000 while the young girl is product suppliers who earns an extra $3000. By using O2O, both product suppliers and customers are better off once they get rid of all retail dealers as the young lady and charming man in the above story.
Comment:
This post gives me a wider understanding on the potential of online marketing in the future, and helps me reach my own conclusion about the advantages of O2O e-commerce.
Sources:
http://techcrunch.com/2010/08/07/why-online2offline-commerce-is-a-trillion-dollar-opportunity/
http://www.reuters.com/article/2014/03/31/us-intime-alibaba-group-idUSBREA2U01K20140331
Image:
http://blog.reallifeconnect.com/wp-content/uploads/2012/10/o2o-692×300.png