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China’s O2O Craze Expands On Campus
Online-to-Offline (O2O) services have been all the rage in China as citizens are hunting for solutions to urban life. While the model is transforming all industries, Chinese tech startups are expanding the O2O craze to a particular demographic: university students.
China has nearly 30 million university students now thanks to the enrollment expansion program launched at the beginning of this century, according to a research by Shanghai Jiaotong University. The customer base creates a large and relative untapped market for all kinds of services from education, entertainment, e-commerce to social networking. However, it is not only the sheer market size that lured domestic companies.
Despite being stereotyped as broke penny-pinchers, the group has a considerable amount of spending power. Chinese students’ average annual spending stood at around 11,347 RMB (around $1,826 USD) in 2013. Furthermore, most current university students are post-1995-ers, a new generation born in the digital/mobile era, and more responsive internet-related services and willing to try new things. Accumulating potential customers early is another incentive for companies to deepen forays in this burgeoning vertical.
By a simple definition, O2O is anything digital which connects people to bricks-and-mortar businesses. Considering the special demands of university students, Chinese internet companies are tapping the sector from the following perspectives:
Lifestyle And Logistics
Entertainment, travel, food and logistics are where the O2O model started, and are still its primary focus on campus. The services penetrate every aspect of a student’s life from online food delivery (Ele.me, Meituan), online grocery marketplace (59store, Zhai.me) to logistics services (Xiaomai).
Online Finance Services
China’s student loan market is just one year old, but it has already witnessed the emergence of several leading players in the battlefield. The evolving market has attracted heavy-pocketed Chinese internet giants to jump onboard.
Qufenqi, a leader in the student micro-loan sector, has secured $200 USD investment led by Alibaba’s financial affiliate Ant Financial this August, only three months after its direct competitor Fenqile got backings from e-commerce site JD in March. As a step towards its financial transformation, China’s Facebook clone Renren launchsed launched its installment payment platform Renren Fenqi. Other emerging companies in this field include Aixuedai, Ufenqi and Aliwey.
However, the booming development of student loan industry also raised public worries of the risks of a high bad debt ratio and the sustainability of funding supply chains.
Part-time jobs constitute another important part of campus life, allowing students to earning extra money and gain social experiences. Leading startups in this sector include Jianzhimao and Tanlu.
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