Group buying is a wake-up call for China's internet business

In the original group buying very popular in those years, after a period of retreat, slowly also the true colours, can not continue to remain only closed. Now, after two years of wave after the sand, domestic group buying only a few players.

The group's 800 report showed that in September this year, the number of domestic group buying sites had shrunk to 2,919, down 42% from a year earlier, meaning that 5.9 groupon sites would disappear every day.

In the past year, the handle net, the regiment treasure Net, 24 coupons and so on buys the website to have the more intense layoffs, the turn, the founder and the management relations aggravation and so on the storm. After the storm, the enterprise internal ecological setback, self-healing system suffered a heavy blow. Handle net sales from domestic group purchase first fell to three, group treasure Net, 24 coupons from last year's top five, has been on the verge of shutdown state.

So far, domestic group buying has developed only two years, from rapid expansion to rapid contraction, which wraps up the rising domestic capital of the impetuous and domestic internet entrepreneurs a simple and brutal sense of competition.

Group buying is a wake-up call for Chinese internet start-ups.

Bubble burst, capital brake

Domestic group buying industry in the first half of 2011 had a golden period. Due to the low threshold of participation, as well as the advantages of prepaid funds model, domestic group buys from March 2010 two or three, soon developed into the end of 2010 more than 4,000, to June 2011, the number is close to 6,000.

Tuan Bao Network CEO as Spring Thunder to reporters that, to a certain extent, the capital of domestic group buying two years "roller coaster" type of development played a lever and pull off the role. In the first half of 2011, the concept of group buying almost reached boiling point in capital financing. Full-time CEO Feng (micro-blog) has "not melt to 50 million of dollars embarrassed external disclosure" to describe the period of group buying financing.

April 2011, the handle net obtained 100 million dollar financing, the valuation 1.1 billion dollars, took the lead to launch the domestic buys the financing tide. Under the capital agitation, handles the net to begin the layout expansion play, and traction the entire industry to the scale race.

Ruzenwang, an independent analyst, said that the handle model was established in the first to obtain huge financing after the "high fast hit", so that other competitors to follow, in addition, enterprises in the high-speed expansion period of high net assets yield, handle can be listed after the risk passed to the two-tier market.

To its miscalculation, the US IPO market has closed its doors to Chinese companies since June 2011. At the same time, the financial problems facing Groupon after the IPO accelerated the bursting of the group buying concept bubble. The understanding of the capital to group buying begins to shift from the turnover direction to the gross profit orientation. In addition, as a result of the European debt crisis, some private equity funds eager to seek to withdraw, but also accelerated the burst of group buying bubble.

Capital suddenly "pull off", let domestic group buying unprepared. Handle, regiment treasure, 24 coupons at the end of 2011 faced with no private investment, and can not be in the United States two-tier market ashore embarrassing situation. During the same period, the cases of bankruptcy, founder and investor disputes were frequently staged.

One investor involved in group buying said that in the case of a handle, the C-round financing was valued at $1.1 billion trillion, but from the current capital market, the US-listed Only 330 million and 530 million U.S. dollars per market value, Groupon from the first day of the listing of more than 17 billion U.S. dollars down to 2.8 billion U.S. dollars, and has not seen a bottom trend, after most of the projects are difficult to preserve capital purchase.

To draw money, some investors prefer to bleed for sale. Public data showed that the handle was valued at about $300 million trillion in the previous listing, compared with the C-round financing that had shrunk by 1/3, and because of other problems, the handle stopped its IPO plan this June.

and in order to obtain potential buyers, domestic group buying also began to be driven by the investment side layoffs, restructuring, through "slimming" in exchange for more decent financial indicators. ren Chun-Chun has said that its investors asked the mission treasure net to lay off 70% to continue to invest. In the first half of this year, handle, litters regiment, full and other group purchase sites have varying degrees of personnel reduction News was disclosed by the media.

To seek a broader exit, some investors are aggressively looking for acquisitions. In August this year, Tencent invested two group buying company F Group and Gaobong announced reorganization. Some investors believe that mergers and acquisitions can expand the scale, reduce duplication of investment, and can introduce more investors to broaden the capital side.

At present, domestic group buy The Matthew effect is beginning to be obvious. Regiment 800 data shows that this August, the top five domestic group buying total market has accounted for the overall industry 78.5% of the share. In addition to the first American network has a greater advantage, the second to fifth market size gap is not obvious. This also means that domestic group buying also has a lot of space for mergers and acquisitions.

Mode checking

The disillusionment of domestic group buying, but also has the pattern understanding on the misunderstanding. NET CEO Yang Hao-hu that this misunderstanding can be summed up as "group buying mode and O2O Blue ocean" deviation.

There is really a lot of room for local life, but group buying is just one of the models. In addition, the largest cost center for domestic group purchase from the sales staff costs, as well as the flow collection costs, but less than 10% of gross margin can not be covered. Group 800 founder Hu Chen said, because the current market bargaining power in the hands of Merchants, group purchase site to improve the gross margin can only stay in the verbal.

Yang Hao-hu believes that group buying based on local life services, but if you can reduce a large number of sales staff costs, then group buying is a good model.

In fact, litters group, full, Group F and other group purchase sites are actively looking for model innovation. Feng believes that group buying is not a fixed model, it is only for the rapid entry into the O2O market and the existence of an initial model.

Hu Chen said that the core demand for users on group buying sites was to find affordable services, not to emphasize which form of discounts, and whether the buying platform could help manage its customers. Hu Chen that the traditional group purchase mode, vouchers, loyalty card, three forms on the same platform integration trend is obvious. For the merchant, the purchase is used to pull new, vouchers used to pull repeat customers, Points membership card will help to improve user loyalty.

Some investors believe that the group purchase site should be accelerated transformation, through the mode of innovation to reduce the homogeneity of competition. He pointed out that the two-year development of domestic group buying, is also in the rapid rise of the Chinese Internet development in miniature. The domestic internet industry should come out from the delirious of "rapid replication and lack of thinking".