O2O Competition
The Internet industry is expected to see fierce competition next year in the market of Online to Offline (O2O) that connects things on the Internet to things in the real world.
According to the Internet service providers including Naver and Daum Kakao on Dec. 16, these companies are planning or preparing to launch new services aimed at the O2O market next year.
On the same day, Naver launched a mobile platform “Shop Window” as its first service in the O2O area. Shop Window is a new O2O service that introduces products from offline stores, which Naver chooses, to consumers on its mobile sites. Naver plans to connect and sell products though the service. The items for sale will be divided into three categories: Style Window, fashion and clothing goods; Fresh Window, agricultural and fishery products; and Living Window, home decorative accessories. Currently, it sells about 700 products in Shop Window, including about 600 products in Style Window, about 100 products in Fresh Window, and about 10 products in Living Window.
Daum Kakao is also planning to launch new O2O services next year.
Daum Kakao picked O2O as a new business when it merged in October. It didn’t mention a specific O2O business model at that time, but lifestyle services such as “Kakao Taxi,” in the commerce area were expected. In August, before the merger took place, Kakao launched a new service called “Yellow ID” that allowed small businesses to promote and sell their products to customers through Kakao Talk, its messaging application. However, the company says it is hard to say that it is the case for an O2O business, since there were no functions for placing an order or payments.
Commerce is the area in the O2O market that the industry is paying attention to next year. In the past, most consumers were shopping offline, but more and more people are now shopping online and using their mobile phones. This is why the O2O market, which embraces both areas, is expected to grow. According to recent data released from the Korea On-Line Shopping Association and National Statistical Office, the transaction volume in mobile shopping stores in the third quarter increased 122 percent over the same period the previous year.
The Economics and Business Research Institute at KT predicts that the O2O commerce market will grow to approximately 15 trillion won (US$13.7 billion) this year, and up to 300 trillion won (US$274 billion) in the future.