China’s internet giants planning new online to offline services

September 1, 2013 Leave a comment

China’s internet giants planning new online to offline services

Staff Reporter

2013-09-01

After Baidu, China’s largest search engine, spent US$160 million to buy a 59% stake in the group purchasing website Nuomi, other leading internet companies, such as Alibaba and Tencent, have also started planning an online to offline service. As an increasing number of companies entered the market, the online to offline service was expected to reach a trillion yuan (US$163.25 billion) in market scale, a source told the National Business Daily.Renren was the majority owner of Nuomi before Baidu made the purchase.

Renren’s financial reports show that for the first quarter of this year the website contributed US$5.1 million in net revenue. During the second quarter of 2013, the total transaction amount was pegged at US$120 million, with 30% stemming from mobile users. At present, Nuomi’s market share was far smaller than Meituan and Dianping. In 2012, Nuomi suffered a loss of US$27.3 million, accounting for 36.4% of Renren’s total loss.

But group purchasing websites are typical examples of online to offline services, where actions done online directly relate to real world events or places. Following intense competition, few websites like Nuomi exist now, with sites featuring maps and navigation, online reservations and coupon offerings becoming the main portals for online to offline services.

Renren CEO Chen Yizhou said that the large number of users of online to offline services indicated the emergence of a brand new internet business. After the service had succeeded, its market value would soon catch up with that of business to customer service.

In 2008, Baidu’s online map service became the most sought after product in the online to offline market. Alibaba entered the online to offline service in 2006, when it bought a restaurant rating website.

Tencent launched online movie tickets booking service in 2008, which was also part of the online to offline services domain.

Filed under TMT Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment