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People's Daily Online>>China Business

China's group-buying sites struggle to survive

(Guangming Daily)

13:20, November 23, 2011

Edited and Translated by People's Daily Online

The U.S.-based Groupon, the global leader in group buying, has finally begun trading on the NASDAQ after a series of setbacks, including a delayed IPO, a reduced IPO volume and counterfeit goods scandals. At the same time, China's group buying sites are all struggling to survive a "harsh winter."

According to statistics from a media monitoring company, many Chinese group buying sites, which used to splash their money about, have scaled back ads since July this year. The total ad spending of the domestic group buying industry has dropped from more than 160 million yuan in July to less than 100 million yuan, hitting a record low of 60 million yuan in August.

Furthermore, many Chinese group buying sites have reportedly conducted mass layoffs or gone bankrupt. Gaopeng, a joint venture of Tencent and Groupon’s China group buying, reportedly laid off nearly 150 employees of its Shanghai branch and nearly half of its editors only six months after its high-profile launch in March this year.

Even the well-known group buying sites Tuanbao and Wowotuan have reportedly laid off more than 50 percent and 70 percent of their employees, respectively.

According to a report, 754 Chinese group buying sites shut down in the third quarter. Nearly 1,500 domestic group buying sites closed or quit the group buying business amid fierce competition as of the end of October, accounting for nearly 26 percent of the total number of group buying sites in China.

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