Where have China’s big group-buying websites gone?
Just five years ago, when you wanted to watch a movie you went into a cinema and bought a ticket. These days, however, you can use your Internet-connected mobile phone to group-buy a virtual ticket, which can be exchanged for a real ticket.
If that seems easy and inexpensive, it is, and the ease and possible profit margin was not lost on eagle-eyed investors and others. The situation today is something of an economic mystery.
From Sept 23 to 5:30 pm, Oct 21, a total of 17,085 people group-bought their movie tickets, together with popcorn and a bottle of fruit juice, for 31 yuan ($5) on nuomi.com, a Chinese group-buying website. The original price for a single ticket in the cinema on Fuxing Road, Haidian district, Beijing is 90 yuan (almost $15).
The arrangement, and many like it, seemed like a win-win situation. Consumers saved money, while goods and service providers, such as restaurants, hotels and hairdressers, were able to capitalize on their unused capacity, promote their brand, or expand their service area.
South Beauty, a high-end restaurant chain hit hard by China’s frugality campaign, group-sold 12,165 “dinners for four people” at a price of 298 yuan on the group-buying sub-site of Dianping.com, a website where people post their reviews for restaurants, from April 11 to 5:30 pm, Oct 21. The original price was 1,234 yuan.
Tuan800.com, a group-buying navigation site, which also releases regular data analyses, provides a general picture of the industry. According to the website, a total of 120 million people in the Chinese mainland group-bought something or some service in August, up 109 percent year-on-year. Tuan800 added that the value for all these group-buying deals for this single month reached 7.7 billion yuan, up 108 percent year-on-year.
But just as group-buying seemed ready to enter daily life for good, Chinese group-buying websites – once the darlings of venture capitalists, now face an unpredictable future with many being gobbled up by larger companies and acquired, others vanishing from the Internet all together.
The following examples beg the question: what happened to China’s major group-buying websites?
October 2014, Lashou.com
Sunpower Group announced on Oct 19 it had acquired Lashou.com, one of China’s earliest group-buying websites, but has not disclosed the deal price, according to caixin.com.
Sunpower, headquartered in Nanjing, capital of South China’s Jiangsu province, has five business focuses, including real estate, health care and retail. ?Zou Yan, spokesman for Sunpower, told caixin.com that the acquisition of Lashou.com was to help improve Sunpower’s O2O (online-to-offline) platform.
Lashou.com, which went online in March 2010, received a total of $166 million yuan from investors between April 2010 and April 2011, according to Tuan800.com. Lashou even tried to go public, the first Chinese group-buying website to launch an IPO in the United States, and was valued at $1.1 billion yuan, but it failed at last.
Group-buying deals worth 300 million yuan were made on Lashou.com in the first eight months of this year, down 1.77 percent year-on-year, according to Tuan800..
The company might now have a market share of only five percent, according to a survey cited by caixin.com.
March 2014, Didatuan.com
Didatuan.com, which went online in July 2010 as a group-buying website and once had a top-five trading volume, closed its group-buying business on March 31 and turned to develop a group-buying navigation service, according to information posted on tuan800.com on April 3.
At the moment, however, didatuan.com cannot be accessed online.
January 2014, Manzuo.com
Shenzhen-listed Suning Commerce Group Co Ltd, China’s leading retailer, announced on Jan 27 it has fully acquired Manzuo.com, which went online in January 2010 and was China’s first group-buying website, according to cnstock.com. The exact details of the deal were not announced.
Manzuo.com was integrated into Suning’s local life department and Fang Xiaohai, Manzuo’s founder, stayed in Suning to expand the conglomerate’s O2O business.
Group-buying deals worth 70.8 million yuan were made in the first eight months of this year on Manzuo.com, up by 3.74 percent year-on-year, according to Tuan800.
August 2013 to March 2014, Ruomi.com
Baidu announced in August 2013 that it would invest $160 million into Ruomi.com and would gain a 59 percent stake of the group-buying website that went online in June, 2010.
At the end of 2013, Shen Boyang, the CEO of Ruomi.com resigned and on March 6, 2014, Ruomi was rebranded Baidu Ruomi.
According to Tuan800, group-buying deals made on Baidu Ruomi in the first eight months of this year hit 727.6 million yuan, up 7.55 percent year-on-year.
January 2013, 24quan.com
Du Yinan, founder of 24quan.com, a group-buying website, said his company has been closed due to failed talks with investors, Qilu Evening News reported on Jan 14, 2013.
August 2012 to January 2013, GaoPeng.com
In August 2012, GaoPeng.com, the Chicago-based Groupon Inc’s China joint venture, merged with Chinese group-buying website Ftuan to form a new company called GroupNet.
However, on Dec 12 the same year Ftuan was renamed GaoPeng and its domain name was changed back to gaopeng.com on Jan 15, 2013.