A majority of O2O business models are centered on repeatable, often daily transactions. Food delivery is thus one of the most active areas of investment, and has already seen the closure of dozens of start-ups. Most of these business models have gone under simply due to the sheer intensity of subsidies, and massive losses, that are being racked up by players seeking traffic. Delivery and other logistical costs and complexity, aggravated by otherwise low barriers to entry, lead us to expect food delivery to remain a major loss-making corner of the O2O movement for years to come.
Another area to have seen a profusion of business models includes housekeeping-on-demand, maintenance and moving services, and other O2O offerings involving the summoning of service professional to the homestead. Again, often predatory competition may be to blame. O2O direct-to-home services in the beauty and wellness space, such as manicure/pedicure, hair styling and massage, also mushroomed as an investment category in 2013. Inadequate offline professional resources and support and poor service quality management may explain many of the failures that we have seen since.
Possibly the highest profile and most widely adopted O2O service relates to the hailing of transportation. Uber is one of the world's first movers in this.
