Group buying competition to pay for users

In the recently held Q1 conference call to answer the analyst about group buying business glutinous rice problem, Chen Yi Zhou said: "Sticky rice net is to convert Renren users to pay users, and we believe that 5 years later will be a large part of the revenue from the direct sale of goods and services to users." Our main users are college students and white-collar workers who will be the source of our long-term income.

There are more than 1000 group buying sites in the market, the competition is extremely fierce, so we increased the investment in glutinous rice, last year, the sum of investment in glutinous Rice has 9 million U.S. dollars, accumulated 2 million paid users, 4 million registered users, The cost per unit of paid users is around 4.5 U.S. dollars, while China's E-commerce site paid users to convert the cost of 20-100 U.S. dollars. Our funds are used efficiently and we will try to keep this situation in the future. We want to be the leader in the group buying business and we want to be the winner in this race. "

This is the following Groupon prospectus after the disclosure of the group buying site to run the data of the company, first look at the next set of data comparison:

In contrast, the profit prospects of group buying sites appear to be gloomy: the cost of acquiring users is high, users create less revenue, which means that the revenue generated by the user is far less than the user's acquisition cost-group purchase is currently a money to buy the user's business.

1, glutinous rice because someone gave him the flow, so the flow of the acquisition cost is low, 2010 to obtain the average user cost of 4.5 U.S. dollars (get the average cost of users = operating expenses/paid users), compared to Groupon's 77.55 dollars a lot lower;

2, but the average user income of glutinous rice (average user revenue = Revenue/paid users) is only 0.6 U.S. dollars, far below Groupon's $31 trillion, on the one hand, may be Groupon's business (40%-50%) far higher than the domestic group buying site (10%), On the other hand it could be attributed to us consumption levels higher than China;

3, the cost of glutinous rice to produce 1 dollars is 7.5 U.S. dollars, much higher than Groupon's 2.5 dollars.

Handle, American Regiment, etc, glutinous rice, such as the face of group buying consumer differences should not be too large, the user average generation of revenue estimates are not far away, glutinous rice in someone to give him the flow of the case, generate revenue still need such a high cost, domestic other group purchase Web site handle, the operation of the United States Group, etc. At present, from the published data of Groupon and domestic glutinous rice, the purchase of the money to buy the user's business may be more than expected to spend more money, and the key is to burn the money, buy the user can give the purchase site to create a lot of value for the revenue?