Marbridge Daily

China's Group Buy Site "Mortality Rate" Hits 48%

Tencent Tech, 8/15/12

According to a report released on August 15 by Zhejiang-based B2B e-commerce site Netsun Toocle's (002095.SZ) China E-Commerce Research Center, the number of group buy sites in China decreased from 3,990 at the start of the year to 3,210 as of the end of June 2012. Staffing and employee salaries at group buy sites decreased during the same period.

As of the end of June 2012, a total of 6,069 group buy sites had been launched in China, 2,859 of which had subsequently closed for a "mortality rate" of 48%. The figure of 3,210 group buy sites currently operating is similar to the roughly 3,200 group buy sites operating as of the end of 2010.

H1 2012 also saw a decline in average "birth rates" and "resurrection rates" for group buy sites. During the ten days from June 20 to the end of the month, only two new group buy sites launched, an all-time low for the two and a half years since group buy sites first began to appear. During Q2 2012, 51 group buy sites resumed operations - considerably lower than the 111 group buy sites that resumed operations in Q1 2012.

Average daily coverage for Chinese group buy companies displayed an "inverted-V" curve in H1 2012. Coverage decreased sharply month-on-month in January 2012, owing to the long Chinese New Year holiday, then steadily increased until April, when it began once again to decline. Average daily coverage figures remained steady at around 27 mln users.

Chinese group-buy sites, including Hangzhou-based C2C & B2C e-commerce site Taobao's Juhuasuan, saw a total of RMB 14.65 bln in group buy transactions during H1 2012, an increase of 124% over H1 2011's RMB 6.54 bln, but a decrease of 2.74% from H2 2011's RMB 15.06 bln.

Juhuasuan and Tencent's (0700.HK) QQ Tuan ranked first and second among group buy sites in H1 2012. Most of the remaining eight of the top ten group buy sites were independent group buy sites Meituan, Lashou, 55Tuan, online ratings and group buy site Dianping, Beijing-based social networking site operator Renren's (NYSE: RENN) group buy site Nuomi.com, listings site 58.com's group buy platform, FTuan, and Manzuo, accounting for a total 86.6% of the group buy market.

Keywords: national statistics Taobao Internet Netsun Toocle 58.com Tencent market share Dianping Renren Juhuasuan 002095.SZ 0700.HK Meituan Lashou Nuomi Ftuan Manzuo 55Tuan QQ Tuan RENN 58Tuan group buying