Create A Document Set In SharePoint online (Office 365)

This topic explains how to enable the Document Sets feature for an office 365 SharePoint online site collection, and then how to configure the Document Set content type.Document Set is a hybrid between a folder and a list item. It allows you group documents together as with a folder and at the same time, associate metadata to it as you would with an item.

Document Sets are a feature in SharePoint Server 2013 that enables an organization to manage a single deliverable, or work product, which can include multiple documents or files. A Document Set is a special kind of folder that combines unique Document Set attributes, the attributes and behavior of folders and documents, and provides a user interface (UI), metadata, and object model elements to help manage all aspects of the work product.

Fpr more details about this refer here.

Before using the Document set we need to activate the feature in site collection level,

Go to Site Settings, then select Site collection features,

Activate the Document Set feature,

Enable content Type,

Document Set is enabled for a library by enabling the Document Set content type.

Go to the library settings and select this Advance settings option to allow the content type,

Then Save this.

Add content type to this library,

Click New Document and select the content type to create a new set,

New Document

Document Set created successfully to the library.