In 2016, there was a wave of O2O business closures in China, not just the closure of a single company, but the mass death of a string of companies. For example, Dingdang Community, which does community O2O, Hiking Dog Travel, which does tourism O2O, Classroom 36, which does education O2O, and Car 8, which provides door-to-door car wash services, etc., it can be said that the domestic O2O enterprises are in mourning.

Domestic O2O startups closing tide, the situation abroad is not much better, even the originator of the online home O2O - Homejoy also stopped service this year, the original has been bullish, hailed as the star of tomorrow's company, so suddenly ended without a trace, to domestic O2O entrepreneurs have brought a small shock.

Many people feel that these O2O companies are dying of broken capital chains, but this is actually not the cause, but only the result, I think, the mass closure of O2O companies, the reasons are the following 3 points:

1.? Business model is not established

Many O2O project entrepreneurs, the original is from the Internet company out of the technical staff, can not say that all of them are "two ears do not listen to things outside the window, a heart only do program apes" of the technological geeks, but there is a basic fact, we do not deny, that is: many of them! People, on the business model of this matter really lack of sufficient thinking, many entrepreneurs feel that I just do a good job of the product, there is no worry about no users, but the reality is not so.

For example, the wedding O2O cool knot network, his founder himself is an Internet company to do technical origin, at the beginning of the venture, there is no good business model, and finally burned all the funds, sad out. Because, the wedding industry, is a typical low-frequency industry, simply do not form a consumer sticky, and consumer habits, but also not you can be educated in the short term, which led to a lot of this O2O wedding platform, profitability is far away, basically in the struggle.

2.? Insufficient access to traffic

The Internet economy, in a sense, is the traffic economy, for Internet businesses, no traffic is not. Many founders of technical origin, to do O2O project, by definition, should not lack of traffic, they are familiar with a variety of SEO technology, know how to use a variety of Internet tools to attract traffic, and even within the enterprise, there will be a team specializing in traffic. But on this issue, the Internet's "Matthew effect" is once again revealed: some large platforms or giants, such as WeChat, Taobao, etc., with a large number of users to occupy the entrance, becoming a "black hole of traffic", so that the traffic resources that were already scarce, become more and more scarce!

For example, the 91 foreign teaching network, 36 classroom, housing network, pocket travel, etc., all because they can not afford to buy traffic and fell one after another. At the beginning of the year, the merger of fast and drip, to a large extent, is also due to cost considerations, because if so continue to burn, both sides will inevitably fall into a predicament.

3.? Distribution costs are too high

Some O2O project founders, at the beginning of the venture, did not take into account the distribution costs of this issue, in fact, with the development of Chinese society, the domestic labor costs have been rising in the past few years, and the distribution of the typical "labor-intensive" business, for some of the needs of the O2O project. For some O2O projects that require door-to-door delivery, this has become the "last straw that breaks the camel's back".

For example, to do a kilometer to the door of the book delivery "fast book bag", the gross profit of a book is only 2-5 yuan, but go to send a book, often to spend 20, 30 yuan - distribution costs are too high! The founder of "fast book bag" later revealed himself: their distribution costs, accounting for 70% -80% of the overall operating costs, which is too heavy for startups! Because you are not Jingdong, there are not so many categories to send, the thin profits are labor and self-built warehouse costs eaten, which reminds me of the famous "Occam's Razor": if not necessary, do not increase the entity.

So, is O2O really hopeless? What do you need to do to get through this entrepreneurial winter? First, you need to understand what the needs of consumers and merchants?

Consumer demand is: low price discounts, good service experience;

The merchant's demand is: maximize profits, thin margins, incidental promotion;

The platform's demand is: how to do a good job of the third party, and can be self-profitable.

This, each link requires entrepreneurs to brainstorm, and give practical solutions, so as to realize the consumers, merchants, platforms, three **** win.

O2O project, should put an end to the false big empty, advocate the real small real, in-depth observation of the real transaction details, only to the consumption of small problems solved, it may bring real benefits to the enterprise. Based on this, I give O2O entrepreneurs three suggestions:

1. Choose the project to be careful:

One is to try to choose high-frequency projects. Because high-frequency means high repurchase rate, high repurchase rate means user stickiness, only user stickiness is relatively large project, O2O mode is meaningful, those who buy a house, wedding and other areas, only need to use once in a lifetime of O2O projects, even if the unit price is high can not be done.

The second is to try to choose heavy vertical market segments. Don't go with some big platforms to fight traffic, put your own niche market, do deep and thorough. In the development of strategy, do not go to do "local Taobao", you face different market capacity, Taobao is facing the national market, and you just serve the regional market, even if you have a national vision, but also the first local win!

Third is to try to choose a high unit price of the project. It has been mentioned above, the distribution cost of doing O2O is very high, how to solve this problem? One solution is to try to choose projects with high customer unit price, and use high customer unit price to cover the high distribution cost!

2. Make the service high threshold:

O2O is online + offline (online to offline), in fact, the offline end of the focus, or even say, an O2O project can be a success, 20% rely on the line, 80% rely on the offline.O2O project, rely only on the technology is unable to bring consumers a good experience, no matter how you solve the problem. Good experience, no matter how you solve the payment problem, how to achieve product closure, leaving aside the specialized services, are of no practical significance. Before the group-buying site, why so many complaints? It is because they take the service, as a commodity in the Tmall to do! Service is not a standardized commodity, the service is personalized, differentiated, diversified, can not only seek quantity, not quality!

Dripping taxi, Dianping these O2O giants, are fierce, as a small business, how to avoid the vicious competition of these giants? I think, in essence, is to establish their own threshold! Technology and capital can not be considered the threshold of O2O, only to play the local advantages, good service is the threshold to resist the strong enemy. Localized laundry, localized car wash, localized cleaning, home delivery, etc., are the use of offline resources to dominate the O2O project, large enterprises do not have local resources, but not to do, so the more small businesses, the more you have to deepen the offline, good service.

3. Jump out of the APP pit, start from the WeChat public number

One reason is that it is very troublesome to do APP, relative to the WeChat public number, to do APP, not only the development time is long, the technical difficulty is large, the cost of the cost is high, and it's very trivial: you need to adjust the style of the style of a pixel by pixel to do compatible, and want to improve the retention rate of the user, you must also To constantly iterate, improve, maintain, which requires entrepreneurs to invest a lot of energy and financial resources, it is easy for entrepreneurs to fall into the development of the quagmire.

The second is because, now the APP promotion cost is getting higher and higher, the cost of a user acquisition of the popular APP, online almost to about 10 yuan, the cost of offline or more than double the online, even if the user downloads your APP, if your product, on its own, does not have a lot of attraction, the retention in the future is also a problem.

Three is because, Apple's APP ecosystem is blunt, through the natural flow of the probability of success is getting smaller and smaller, that is to say, APP is now being marginalized, the future of APP will be more and more difficult to do APP, such as WeChat APP, has a monopoly of 70% of the flow of the mobile Internet, which has become the operating system, since the fight can not beat it, it's best you The first thing you need to do is to choose to work with it.

So, my suggestion is: to do O2O projects, it is best to jump out of the APP pit and start from WeChat public number.

Finally, we make a summary: enterprises that have entered the field of O2O, if you want to avoid closure, you have to do the following three things: first, from the beginning, we have to think clearly about their own business model, secondly, we have to rely on the user's pain points and the real needs to do innovation, and thirdly, we have to pay attention to the offline service to bring a good experience to consumers.

In addition to this, the mentality of many O2O entrepreneurs also needs to be adjusted. There is a saying in "Three Bodies" that weakness is not an obstacle to survival, arrogance is. Weak species know they are weak, and will run and hide if they can't beat them, so it's hard to die. But if arrogance, think that tomorrow can certainly hit an elephant, do not reserve, today eat all the things, so it is easy to die. What is the arrogance of entrepreneurs? It is to know that the project is not reliable, but think it is reliable, this is is arrogance, is a big taboo for entrepreneurs, I hope that entrepreneurs must bear in mind!

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