Today was an incredibly interesting day. We visited the company Eastday, which is a major internet company in Shanghai. The company began as a media company, but with the rise of the internet, transitioned into e-commerce. The company seemed similar to Amazon – in addition to selling lots of products online, it also provides cloud servers for other businesses. However, what’s even more interesting is the way the company is expanding. They are promoting a concept they call “O2O”, which means online to offline. The idea is to provide webpages which display information about products to draw people into physical stores. The goods seemed mostly to be luxury goods, like French Wines. The company’s latest division is a physical art store. The gallery has a small tea area, and is decorated with traditional Chinese decorations.

I found the company totally fascinating. In the United States, the trend seems to be away from brick and mortar stores towards e-commerce. Yet, Eastday is actually using revenue from their internet business to expand into brick and mortar stores. Part of the reason this strategy works is because Eastday seems to be providing luxury goods, which the user wants to experience before the buy. This is especially true in art, where the customer can visit the gallery, experience the works of art, and then talk to the curator over a glass of tea. Eastday is able to increase demand for these products by leveraging their huge media presence. Could this model work in the United States? I think the first problem is that the markets Eastday is establishing these stores to create already exist in the United States. Further, it doesn’t seem like there’s a web retailer with the same level of media and commercial presence (perhaps Google or Amazon?) to generate the level of excitement that these stores need to exist profitably. Finally, it seems that most American consumers prefer convenience over experience. Still, the idea is very interesting and I believe that with the right market, O2O could also become an American phenomenon.