At the beginning of this year, with the startup capital market still bubbling, it was easy to get a car wash in China. There was a plethora of online-to-offline car washing services available in major cities. You could book one online and they would come to your place and wash your car for cheap – sometimes as cheap as RMB 1 (US$0.16) due to promotional rates.
Now, as 2015 nears its end, even in Beijing there’s basically just one option： Guagua Xiche.
What happened to the others? Well, the combination of heavy competition necessitating very low promotional rates and a lack of investor confidence in the scalable future of O2O car washing has not been kind to them:
That might seem to bode poorly for Guagua Xiche, which is essentially the only major survivor at this point, but in fact the opposite is true. Each of the startups that shut down had managed to accumulate some business, and since they have shut down or pivoted many of those customers have switched to Guagua. Guagua CEO Xi Jianjun says that these days, the company is getting tens of thousands of daily orders. Guagua is still offering a nearly-free first wash, but after that the price jumps to RMB 29 (US$4.60) per wash, and Xi says the company is planning to raise that in the near future.
Guagua Xiche looks poised to be the winner by default in China’s O2O car wash battle, but with investor capital hard to come by and so many competitors having gone under, the future of the O2O car wash business model is far from clear. Guagua has bested or outlasted its competitors, but now it will have to prove that it can actually build a sustainable long-term business.
Do you think China’s niche O2O players can last in the long-term, or will they get swallowed up by bigger internet firms?
(Source: Sina Tech)
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