Online to Offline (O2O) Integration: IoT Applications

Investment that will provide channels to introduce Internet of Things to services that are mostly in hot demand by customers has been kicked off by China’s leading search engine Baidu Inc. The company has made an investment in online laundry service provider Edaixi, Chen Jianghua, a director of Edaixi announced to the Global Times.

According to Andrew Ng, Chief Scientist at Baidu, Co-founder at Coursera and Associate Professor at Stanford University “I’m seeing internet services in China develop in a very different direction than the US. China’s biggest trend is O2O (online to offline), meaning using your cellphone to discover and buy local services, such as laundry, a car wash, booking a hairdresser, hiring a tennis coach, etc. These types of O2O services are pervasive, affordable and routinely used by a very broad segment of the population. I hope the development of O2O accelerates in the US too”

Nirmit Desai, a friend to Prof. Andrew noted “I think population density is a key for O2O success. It’s too much of a hassle in the US to drive to the physical service which may be miles away. In India and China, you just have to walk a few minutes!”

The investment received an undisclosed funding from Matrix Partners and SIG China. In addition the Beijing-based firm just finished its second round of financing, which totaled $100 million.

According to the report, Edaixi founded in 2013, offers laundry service to the growing number of Internet users in China who have formed the habit of shopping online. People can have their laundry picked up, washed and returned within 72 hours by using the Edaixi app. currently operating in Beijing, Shanghai and Shenzhen, Edaixi plans to extend its services nationwide.

It receives more than 100,000 orders per day in 16 cities where it has 5 million customers, tech news portal reported on Wednesday and they plan to cover 100 cities in China. The second round of funding will be used to offer subsidies to the laundry firm’s customers, recruit local and foreign talent and build up its “e-housekeeper” team with the aim of expanding the domestic market, according to the report.

Experts said that through providing Edaixi’s laundry service, Baidu can introduce its other O2O services and payment tools to consumers. The Internet giant has already made several major moves in the O2O sector.

“Baidu is seeking a business model that can generate cash flow, so it is increasingly focusing on the O2O sector,” Zhang said a CEO of the iiMedia Research Institute.

The O2O business represents the wave of the future as users turn to smartphones and away from personal computers, and no Internet company can afford to ignore this trend if it aims to succeed, Li Chao, an analyst at Beijing-based consultancy iResearch, also told the Global Times on Wednesday.

“Internet companies aim to provide as many services as possible to customers through their smartphones, and that will be the new income source in the era of the mobile Internet” Li noted.

Meanwhile, to purchase goods and services, customers must use their online payment accounts, which provide valuable information for Internet companies seeking to offer Internet-based financial services, according to Li.