LaLa Land in Beijing: the O2O 2.0 War — Sharing Economy

Last week I had talk about O2O economic in China from 2013–2015 and reviewed the real winner of this SaaS ‘war’ in China. This week I would like to tell you guys on the mutated O2O and the crazier battle that is happening right now. They call it the sharing economic, but to me it is the O2O 2.0.

History of sharing Economic in China

The sharing economic really started in the DongGuan China. Is a small 3 tier city in China (an hour car ride away from Shenzhen). The city’s experience an economic boom. From the year of 2000 to 2011, it’s GDP is top four in amount the southern part of China. So at this point you are probably wondering what magic thing that they are sharing causing such an economic phenomena? Well the answer is — women. Prostitution is not legal in China but has been an grey area even now. When you speak of prostitution in China, Dongguan is the place to go ( I don’t have answer for why). Many young girls from the villages want to get rich quick will come to dongguan and boost this sharing economy. Resulted in people from all over China come to DongGuan to sharing the love. The usual for an visitor to Dongguan is they come in during the afternoon, eat some snacks at a restaurant, and goes to KTV drink up and sing with the girls. When is about time they will open an hotel and finish the business. After the business they felt tired and get an massage and get ready for dinner. Refreshed and feed they are ready for round two. So this sharing economic not just help poor village girls to earn money, it really boost up the entire food, hotels, massages and entertainment business within that area. The entire city was filled with girls calling for business on the street it was really something to see.

Sharing economic now

As WeChat being developed, and the crack on prostitution from the Chinese government, this unique sharing economic start to move from offline to online. People can order an service at the finger tip from their Wechat. It became the forerunner of O2O sharing business. Now in China, we see thing like sharing cars, sharing bicycles, sharing motorbikes, sharing power banks….. different varieties and many competition.

War on sharing bicycle begins

One of the most success new sharing economic is the bicycles. Sharing bicycle was started in with two companies, the leading one is ofo, then follow by the start of Mobike. Both have large funding and intensive investment background. Ofo net worth a two billion dollar and Mobile is worth now billion dollar. Ofo started in campus, the founder simply want to create these sharing bikes that can be ride though-out the campus, so students will can go to class faster and easier. After established in a few collages they decided to take it to the street for the public to use. Mobike started was because Mobike’s CEO (who is also Uber China’s ex-CEO) was on a business trip, after he get off from the train he realized that destination he try to get to is too far for walking and too close to get a taxi he wished he had an bicycle. So with that though he created Mobike. Monkey see monkey do, after the success story of these two company many other bike sharing services rush into the market. In a month, there are at least seven types of different bikes on appear on the street. Bluegogo, Rainbowbike, Goldenbike, Greenbike etc. it become an chaos. You see bike everywhere. Blocking the traffic, the walk way. Kind of like the Situation back in Dongguan where girls were everywhere.

Government effect

Finally after some month of chaos on the street of every city the government finally decided to do something with it. First, they announced only ofo and Mobike are the only legal bike sharing company. All other company are not legal and not allow to put their bike on the street. Second, government set regulated parking zone for citizen to park their bikes. And lastly, government put up some bike storing facilities for bikes to be store properly. With these regulations, finally ended the chaos.

Big Data — The real money behind the sharing

Companies like ofo and Mobike makes money by charging user one RMB pre use pre 15 mins. And there is an deposits 199 for ofo and 299 for Mobike (alittle expensive for mobike because I believe they have better bikes). But that just the small part of the plan. Their big plan is to get user data and sell these data to someone useful for analytics. They get the data from their APP and WeChat and Alipay. When you scan the QR code on the bike they know who you are and where you going. In another words, they know where you live, where you work, where you go for fun, what time you will do all these things. All these information the platform can sell it to whoever they want. They can sell these to food delivery platform company like Meituan. Where they can us the data to figure out where have the most demand for lunch take out and breakfast order. They can sell it to advertisement company where they will know where to put their advertisement so they can have the most target audience. Of course all these data are open to the government as well.

Winner winner manufacturer gets dinner

Well all the sharing economy war has recently wrapping up and dying down. So far the survival are the bike sharing and battery sharing. If you read my last blog you will know that real winner are the ones that provided the tool. And in this case the manufacturer in Shenzhen area really benefit from this war. Batteries, bikes, umbrellas and many more things are been made. The order are all in large quantity. Just ofo itself is putting an order of 250,000+ bike to be make each month which cost about 200RMB per bike. I am sure you can do the math here.

To wrap up, I believe it is just the begining of the sharing economic, in the near futhure we will see more useful things to be share in China and around the world as well. I believe it not only help people’s daliy life. it will also boost the economy and create more job to people. It is amazing to see how technology is change the way we live.

Hope you like the this blog if you have any thoughts, sharing idea comment blow don’t forget to give me clap if you like it and share my post.

C’est la vie