How can domestic electric dealers break the curse when Groupon is helpless?

Groupon's earnings reveal "broken" frustration.

August 6, Groupon's second-quarter earnings showed revenue of $750 million, a 23% increase from a year earlier, but a net loss of $22.9 million after spending cuts, and a loss of $7.6 million over the same period last year. Of course, the first quarter reported more brutal, net loss of 81.2 million of dollars.

Such data left the capital desperate and plunged 17% after the opening. Compared with more than $30 trillion at its peak, Groupon is about $7, and its market capitalisation has evaporated by three-fourths.

The essence of Groupon's decline is that group buying is only a short-term promotional tool. Rather than a complete business model, it fundamentally fails to achieve the benign operation of merchant, platform, user benefit chain.

American investor Jos Ferrare is more extreme, he believes that group buying can not create value, its mode of operation is "Ponzi scheme", within 5 years, Groupon will die.

If the decline of Groupon will let the Chinese people produce a trace of aloof sigh, then the surviving domestic group buying site will be how to crack this spell?

Groupon's Fading Nature

Since 2008, Groupon has detonated the concept of "group buying" worldwide. With the rise of Groupon, China's major internet companies, entrepreneurs have followed suit, from the rapid expansion of the Hundred-Regiment war.

In fact, Groupon's intention is to gather a certain number of users to achieve collective procurement, thereby reducing the purchase price of goods. Of course, more businesses are willing to buy as a marketing rather than revenue means, in other words, group buying is actually a kind of advertising, a quick way to reach the user.

Groupon will profit from the sale of goods, and Groupon will get a 30%~40% of sales commissions in the early days of real-world buying. A friend who lives in New York says Groupon's initial attraction was that everyone was happy and cheap to buy a lot of products they didn't need at all.

Initially, Groupon did not impose strict restrictions on the type of merchant, so long as it met the demand of Groupon's extremely low price, it could attract users to reach a single quantity and be able to go online.

Groupon's initial rollout was even in a very extreme way, with a single group purchase on a daily basis to reduce the difficulty of consumer choice. This, of course, was later discarded, as both merchants and users needed more locations.

In the 2010, Groupon, who stood on the cusp, rejected Google's 6 billion dollar takeover. Of course, at the time, it was really not a shame, because Groupon was listed in 2011 with a 20 dollar opening and a market capitalisation of more than 10 billion dollars.

Groupon's share price was once more than $30 trillion after the IPO, but it was soon on the road to collapse. Groupon's decline, for various reasons, has rapidly expanded more than 500 cities around the world and hired a large number of line-and-push teams to carry out local business and sharply increase corporate costs. And from the product point of view, with the increase in transaction information, Groupon's user experience is getting worse, businesses feel that the promotion effect, and users often feel cheated.

Overall, Groupon's decline is most fundamentally due to the fact that group buying is not a complete business model. The more developed areas, the lower the user demand for extreme discounts. and marketing as the original intention of the merchant, simply can not achieve its desired promotional effect. In other words, a single group buying mode can not achieve the merchant, platform, user three of the interest chain of the positive cycle, can only this extinction.

American investor Jos Ferrare is more extreme, saying that unlike emerging social media companies such as Facebook, Groupon does not create value but creates an unstable equilibrium. Its entire mode of operation is like a Ponzi scheme that will disintegrate within 5 years.

This year, Groupon has repeatedly self-help but disorganized, increased the wedding channel but soon closed, acquired the South Korean group purchase website Ticketmonster, and even acquired the network apparel retailer Ideeli to transform the electricity business. The recent introduction of LinkedIn's former Gao Thepa Kest Bar Lililai as senior vice president of its products.

Despite ongoing attempts, Groupon is still mired in the mire and has not seen a glimmer of relief.

How to break the curse in domestic group buying

In fact, after hundreds of thousands of groups, after the survival of the various group buying companies, has been using the "foot" vote, to release the dilemma of the purchase mode.

At present, the glutinous rice was bought by the Baidu, the full was bought by Suning, handle, litters market share in the ranks of the top three of the site swallowed up, and the public comments on the group purchase is only one of its many business. At present to group buying as the core business and maintain independent development, only the Chinese version of the Groupon group.

In terms of time, Groupon has developed 1-2 years earlier than the domestic group-buying site, so Groupon is encountering a dilemma, and the domestic group buying industry will also encounter, just a matter of time sooner or later.

But for now, it looks like the group has not suffered from Groupon's plight in China and has developed rapidly, completing 20 billion of its turnover last year, and will sprint to 40 billion yuan this year.

According to the author's actual research, the Chinese version of Groupon Group did not encounter the root cause of the model crisis, because China has a large number of three or four-line cities. In terms of urban form, China's north is much closer to foreign cities, and China's three or four-line cities are a good environment that Groupon has never experienced.

China's three or four-line cities with high population density, fresh things easy to spread, the average income of consumers is low, price-sensitive, and have a strong desire to consume, it can be said that this link and group buying pattern innate matching. The development pattern of the group buying industry in different cities can prove this.

Public comments rely on its comments, promotion mode, in the north of the one or two-line cities such as the city has a solid status, even in the field of group buying, the United States Regiment is also falling downwind.

In addition, while group buying is not a complete business model, it can be combined with other businesses to gain a multiplier effect. For example, Baidu glutinous rice as the main product of the Department of LBS, its back Baidu map traffic, and Baidu tourism, promotion and other business combined to jointly promote the local life field market.

And the public comments relying on the basis of the reviews, combined with promotion, group buying, booking, and other business, can provide a comprehensive marketing platform for merchants, according to the needs of merchants to do a free combination and collocation. This model is more likely to be favored by a wider range of businesses, including high-end brands. Of course, if the needs of users and merchants are group buying, the public comments can also provide this kind of business.

It can be said that the public comments and Baidu Glutinous Rice has been through business integration, through the use of external resources, and other means to solve the plight of Groupon encountered by the model.

Anti-American group, limited by group-buying is difficult to gather the curse of high-end users, in order to continuously impact higher turnover, now can only increase the strength to more than three or four lines of cities, and this year to reach the opening of 300 city stations.

Thankfully, China has a large number of three or four-line cities, and is still the stage for incremental markets. Unfortunately, after several years of market development, three or four-line city merchants are also aware that single group buying does not achieve the desired marketing or revenue effect.

And, since this year with the public comments and Baidu glutinous rice sinking, the United States Regiment's three or four-line city advantage has been some impact. From this perspective, the United States Regiment's ceiling is not far.

To this end, the United States Group is also trying to force from the vertical industry, its American mission hotel, Cat's eye film is its attempt to transform the local life O2O field.

In addition, shortly before the Litters Group CEO Xu Maodong Additional investment in the litters Regiment, and recently there are rumors that the handle will also be a new round of financing, such as to be lucky not to die, and see how it broke the local Groupon curse.