In this study, the current status and application of O2O services were examined. O2O refers to the service that creates new value by organically combining online and offline domains. The global O2O market is growing rapidly, with the annual average increase of 42.2% from USD 9.15 billion in 2014 to USD 75.64 billion in 2020. In addition, the influence of O2O services is expanding, especially in the business sectors closely related to the daily life. O2O services are expected to expand to other industries, such as restaurants, vehicle sharing, lodging. Currently, O2O services are emerging and active in various industries in the US, China, Germany as well as in Korea. In line with this trend, the life-friendly sector (close-to-daily life industries) in Seoul which consists mostly of small business owners is likely to be greatly affected by the expansion of O2O services. In this study, two surveys were conducted to examine the effects of O2O services on businesses and consumers. First survey was conducted on 1,001 businesses in life-friendly sector in Seoul that use O2O service. They are mainly food/restaurant related and O2O services were adopted to cater to the needs of consumers. Their use was evaluated positively in terms of sales growth, but it was reported that businesses find the subscription and/or usage fees burdensome. Second survey was conducted on 1,000 consumers who had experience using O2O services related to the life-friendly sector. O2O services triggered changes in their consumption behavior as there are not only direct 106 Abstract benefits such as convenience, time saving, and systematic service provision, but also indirect benefits such as a choice of payment methods, information acquisition, and non-face-to-face communication. For these reasons, consumers are expected to continue to use O2O services.

Seoul needs to come up with a policy support plan to minimize the damage to small business owners caused by the expansion of O2O services. In particular, it is necessary to protect those who adhere to the traditional business practice. The system must be improved to support them by preventing unfair trade and maintaining a fair O2O service platform ecosystem. In addition, the indiscriminate expansion of the O2O service platform must be watched with caution and the influence of O2O service companies on small business owners must be systematically analyzed and considered when establishing a policy. Policy support measures must be prepared taking the characteristics of each sector into account.