Alibaba Group Holding Ltd BABA 3.83% has been promoting its recent $4.63 billion investment in consumer electronics retailer Suning Commerce Group Co Ltd as its latest push toward “O2O.”

O2O is a buzzword within the e-commerce community for “online-to-offline,” but what does O2O actually mean? And is O2O a real opportunity for companies like Alibaba, or simply a justification for poor share price performance?

O2O Defined

The gist of O2O is that, while a large part of traditional brick-and-mortar retail sales can be replaced by e-commerce, there are elements to physical shopping that cannot (or should not) be replicated digitally. However, just because all retailing can’t take place online doesn’t mean that there can’t be online elements to shopping, and the potential for integration between e-commerce and physical retail shopping is the core of the O2O movement.

Example

Just because a particular business doesn’t have products that can be ordered online and delivered to your doorstep doesn’t mean that the Internet can’t play…

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