With the GMIC (Global Mobile Internet Conference) 2016 going
down this week in Beijing and O2O (online-to-offline) having been such a
conference-defining subject last year, there is a great deal of buzz again this
year on the subject, especially with the Chinese equivalent of ecommerce giant
Amazon (NASDAQ: AMZN), known as Alibaba (NYSE: BABA), having confirmed its
$1.25 billion investment in the rapidly growing food delivery service Ele.me
early last week. This is a big move by the Chinese ecommerce titan to grow its
footprint in an (increasingly vital for retailers) O2O market that currently
dominates much of the retail horizon in China and was valued late last year by
HSBC at around $150 billion-plus on a mere four percent internet penetration, even
as the online segment of this market jumped 80 percent YOY to around a third of
that figure in the first half of last year alone.
Seen by many analysts as a counter play to Alibaba rival
Tencent’s (OTC: TCTZF) sizable foothold in what is the merged result of China’s
top two “local deals” outfits, Dianping-Meituan, which Alibaba divested its
$900 million stake in – the Ele.me deal could be BABA’s ticket to locking down
the brick and mortar side of the equation via O2O. Food delivery to residences
is a model that has been a long time coming, but revolutionary O2O platforms
that let traditional retailers with a physical location tap into the burgeoning
internet/mobile traffic space around them could be just the rocket engines
needed for the model to finally reach escape velocity. O2O could provide the
kind of tight customer engagement needed to seal the deal and BABA is banking
on localization to keep the costs down. At any rate, Alibaba is likely going
for a sole source play here, one that could see the company end up owning
startup Ele.me, and so it makes sense to look at the broader O2O space given
such auspicious events/timing.
Customer engagement is the core of the entire O2O puzzle,
but it’s a tricky animal and it requires the right mix of features for the
consumer and the retailer alike, if one is to get the implementation truly
humming. That’s why a company like Moxian, Inc. (OTCQB: MOXC) is so interesting
in this space right now, where the majority of the players are conventional
retail and online services like Alibaba, who are branching out. As a startup
with the proprietary apps, platform/server access methodologies and virtual
currencies needed to make it all happen, which cut its teeth and put the entire
framework through its paces in Asian markets, Moxian is in the pole position
when it comes to exploiting the ongoing Chinese O2O surge. With a strategy to
geographically target prime metropolitan areas and leverage boots on the ground
sales forces in Beijing, Guangzhou and Shanghai, Moxian’s story is an extremely
compelling one.
Without the trappings of the other sector players, who are
encumbered by legacy service architectures, Moxian is able to focus on simply
growing the number of merchants in its platform’s network, ensuring that its
Moxian+ User App and Moxian+ Business App (for Android and iPhone) remain
feature-rich, and that the kind of high-value big data needed for premium
business analytics is generated. By providing consumers with a robust social
networking toolset that allows them to easily search for things like friends,
interest groups, profiles and topics, as well as chat/share within social
circles, all via a framework that also allows them to find nearby merchants
using geo-location and earn spendable virtual currency (MO-Coin and MO-Points)
or other rewards through gamified content, Moxian is able to also offer brick
and mortar retailers ready-made access to the largest mobile-using population
on the planet.
With nearly a mobile phone for every person in China (around
95 percent market penetration as of 2015), retailers have to be crazy not to
tap into the virtual channel and drive traffic to their stores. The good news
is that Moxian has made it all too easy, with a unique SCRM (Social Customer
Relationship Management) toolkit available via the business app that covers
everything from automated data capture-driven analytics and user-base profiling
to loyalty/customer retention program development and advertising. Customer
engagement tools like notification pushes, online marketing efforts and even
online payments round out the package and create a closed-loop O2O ecosystem
based on logistical realities and social interactions. The company even
provides consulting services to retailers who are new to dealing with the
ecommerce and social media ends of the spectrum, and who want to get it right.
With the rise in China of novel online entities such as the
hybridized Facebook (NASDAQ: FB) and Twitter (NYSE: TWTR)-like microblog social
network, Sina Weibo, owned by Sina Corp. (NASDAQ: SINA), which is trouncing
majors like Baidu (NASDAQ: BIDU) and Tencent at around 86 percent microblogging
market share (based on the highly correlative metric of browsing time), it is
very clear that Chinese social media is every bit the ever-changing and unstoppable
freight train that it is in the U.S. and Europe. Understanding how important
O2O will continue to be for brick and mortar, which still constitutes the
lion’s share of all retail transactions, is essential for investors who want to
ride the wave.
Moxian is in a good position here to exploit the underlying
trend with its proprietary technologies, an expertly crafted approach to the
space driven by field-based leg work, and the potential to set itself up on
multiple revenue sources (merchant fees, advertising, consulting, virtual
currency sales, etc.). Investors should keep an eye on the company for mounting
merchant subscriptions as it rolls out its sales footprint throughout this
year. O2O services like those made available through group-buying sites like
Groupon (NASDAQ: GRPN) and other platforms that offer tangible, real-world
deals on products, or events like concerts, movies and restaurants, are gaining
favor every year with consumers – even as social media becomes a more and more
prominent part of our lives.
For more information, visit the company’s website at
www.Moxian.com
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