Group buying Crisis

Group Purchase crisis (text: Wang Yingxiong)


group Buy is a very good business model, good cash flow, good market prospects, around the friends are mostly said to buy how good, how high the profit; VC is crazy, one investment 20 million dollars, the other followed by investment 200 million "   Reference handle NET financing: in the 8-month valuation from 1 million to 200 million dollars in the industry also from last year's hundred group war into this year's Thousand-Regiment war. The industry is rife with several viewpoints, group buying's ancestor Groupon's gross profit margin at 40%-50%, which is a very high profit margin, China now because of fierce competition, the gross profit margin to led, most of the better group buying sites are in a micro-profit (excluding advertising),    This is not the phenomenon of the Internet circle, because most of the internet companies have to raise more than 3 years to be profitable. Although the group purchase looks beautiful, but dangerous, where is the crisis?   1. How big is the scale? I remember seeing a ppt. This describes the size of group buying, each consumption of 50 yuan, consumption 6 times a year, 300 million of the users. It is a very impressive number to calculate the industry's water flow as high as 90 billion a year. But I'm afraid only God will know if we can not have 300 million of users consume 6 times a year. At least I am not such a user, how many people around you are such users? What's more, if the total flow of water dispersed into the thousands of enterprises, each can get how much? Don't forget that 90 billion is the industry's online.


2, how high is the gross profit? Now every single gross profit is led, after the exposure of CCTV, the home is afraid to do on the number of false, each single consumption of how many? "Handle exposure Deal: 4 projects today less than 10 people to buy" everyone can calculate how much profit per order.


3 How much is the amount of consumption? Group Buy the most money is the amount of income is not consumed, there are a large number of users, in the purchase of the products, did not go to consumption, the probability is very high, probably the industry 20% of group buying did not form consumption. This money is indeed quite a lot, the United States and other sites put forward the concept of refunds, this part of the income will be further compressed. But this is a good way to open up the gap with competitors.


4 How much does the consumer accept? We carefully analyze group buying products, some products are really good, is indeed the general channel can not get, but there are a lot of Taobao on a perennial offer, such as movie tickets, Taobao does have a lot of similar products, although they do not play group buying brand, but provide services will be similar.


5 How big is the impact of the navigation? There are some very bad phenomena in the Chinese market, one is the cottage, the other is to copy the bottom. Group buying, in fact, is in the team navigation station to copy bottom, and a number of major sources of traffic has provided similar services, such as Baidu, 360 are doing group buying navigation, they are training users to navigate the habit, and once the user chose to buy navigation, it will no longer directly to buy the site,    and buy navigation ability is a bidding platform, will directly make the site of the thousands of war hit the impact of death. For example, want to find a KTV group buy, users no longer go to a specific group purchase station, as long as the group to buy navigation, all the purchase information have, as long as in the inside selection is good, users to go to which site is not really concerned about. I am a typical user, I spend a few times buy are not clear in which group buy the site to purchase, anyway, the appearance of each site is the same.

What is the core value of
6 group buying? Foreign investors have always believed that the core value of group buying is advertising value, not sales behavior.   Advertising is mainly embodied in three kilometers of life in the circle of life services products advertising, such as catering, entertainment, leisure. Because of the special competitive environment, the value of advertising has become very weak, which highlights the selling behavior.


7 The gap between the number of Chinese and American group buying, 2 in the United States, 1000 cities in China, the United States is a small town with a population of 502 million people, a large gap in China's cities, both Beijing and Shanghai, more than 10 million people in the city, there are a large number of rural areas.      Group buying is a city-centered business model, as I understand China's situation, there will not be more than 100 cities in China to buy. Group buying this wave and the video site of the year there is a fight, perhaps the next 2-3 years, through the fighting, there will be several large group purchase sites, and small and medium-sized sites will be due to the problems of funds and other slowly transformation and extinction. In addition, I remind the death of the ad site, do not hit ads, as long as the hands of more cash than others, through the next winter, perhaps like video sites, you are the listing of Youku. I heard that the group treasure, handle in the audience to invest 40 million of advertising fees, do not know when they will be from earning back. (This article is originally contained in "Network leader" 2011-04-28 period, have abridged)


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