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Group-buying , a New Hot Business in China

A consumer revolution caused by the internet called B2T (Business to Team) internationally spread to China two years ago. In November 2008, the American Website Groupon was founded, creating a sales model of “one deal a day” and “team purchasing”.  In 2010, many websites using the model of Groupon sprung up in China, growing with great popularity and come to known as “Group-buying”. According to an insider, the best operating state for e-commerce is like a middle-distance race. “It’s neither like short-distance running nor marathon. Sustainable growth is the best state.”

A Review of Several Group-buying Websites’ Survival State—meituan.com, ftuan.com, nuomi.com, and lashou.com

Recently, an article published on the entrepreneur magazine evaluated the survival state of 100 e-commerce websites in China. In the review, meituan.com ranks the first with a monthly sales of 0.4 billion RMB. The founder, Mr. Wang Xing had gone through many difficulties in his previous business, thus accumulated valuable experience.  He made good decisions in advertising, site-branching, and cost management.  He also kept good relationships with its merchants. Ftuan.com targets the city white collars, and is currently in the second camp, with not so clear of a development route. With Tencent being its biggest shareholder, it is currently developing well. On June 26^th 2012, ftuan.com merged with gaopeng.com, another big group-buying site, further increased its stand in the industry and expanded its sales.  Nuomi.com is the first in the industry to go public. It mainly focuses in big cities in China such as Beijing, Shanghai. According to statistics, it has the biggest share of market in Beijing but has a deficit of 8.1 million RMB for the first season this year. The company hopes to make a profit by the end of this year. In contrast with the sites above, lashou.com is in a quite dangerous survival state. It followed a route of fast financing and fast investing in advertisements. The plan to go public in November 2011 failed and lashou.com cut half of its employees. This April, the company took its ads off the portals, resulting a big drop in its network flow. The prospect of group-buying websites still remains to be found out.

http://tech.huanqiu.com/internet/2012-07/2916803.html

http://baike.baidu.com/view/16979.htm