Lingtuan.com: National group buying market statistics report for October 2011

Today, Lingtuan.com released an authoritative statistical report on the national group buying market in October. According to Lingtuan.com, the total sales of national group buying websites in October was 2.468 billion yuan, a sharp increase of 20.33% month-on-month. After three months of sideways trading, the group buying industry chose to break upward. The total sales of group buying in the country from January to October reached 14.327 billion yuan.

Detailed data from Lingtuan shows that the main driving force for the growth of China's group buying market in October still comes from Juhuasuan, which ranks first. On October 18, Juhuasuan announced its independent operation and achieved sales of more than 1.25 billion yuan that month. Its market share in the national group buying market exceeded 50% for the first time, taking half of China's group buying market and approaching Groupon's 54% market share in North America. It is worth mentioning that Juhuasuan is a tightly coupled group buying platform that aggregates group buying products provided by small and medium-sized group buying websites across the country. Its market share of more than 50% in the national group buying market fully reflects the power of "people's war".

The scale of group buying in China, except Juhuasuan, also stabilized after two consecutive months of decline and returned to 1.218 billion yuan, a month-on-month increase of 3.48%. However, compared with the high point of 1.307 billion yuan in July, there is still a gap of 6.8%.

The "National Group Buying Website Census Data Bulletin" of Lingtuan shows that 52 new group buying websites were added in October, hitting a new low in monthly growth since May 2011, mainly because no new group buying websites were born during the National Day Golden Week. By the end of October 2011, there were 5,753 group buying websites in operation across the country. However, the waves wash away the sands, and the traversal test of the national group buying websites by Lingtuan.com auditors showed that metabolism accelerated, and the number of group buying websites closed in October reached 456. Since the first year of group buying in 2010, 1,483 group buying websites across the country have closed down and exited the group buying market in the fierce competition, accounting for 25.8% of the total number of all operating group buying websites, approaching the closure ratio of 1/3 of group buying websites in North America.

The analysis of the group buying data of cities on Lingtuan.com shows that during the group buying adjustment period since August, large group buying websites have gradually stopped expanding into cities, and have closed branches in third- and fourth-tier cities to protect their first- and second-tier bases. From the trend chart of the number of group buying products in the top ten major cities in China drawn by Lingtuan in the last five months of 2011, it can be seen that the number of group buying products in most cities has increased month by month, and the larger the city, the faster the growth of group buying products. Some cities have experienced slight fluctuations in the last three months, but compared with June and July, the number of group buying products in each city has increased significantly.

Analysts at Lingtuan.com believe that the substantial increase in the number of group-buying products is due, on the one hand, to the increasingly fierce competition in the group-buying industry. Group-buying websites have launched a large number of group-buying products in the hope of exchanging quantity for orders and providing consumers with more choices. On the other hand, as merchants and consumers recognize group-buying, the market has indeed had a greater demand and supply for group-buying, which has led to an increase in the number of group-buying products. Wang Qiheng, CEO of Lingtuan.com, believes that multiple groups per day can help group-buying websites enhance the selectivity of users to join groups, and increase the number of website clicks and views. However, compared with the daily group-buying model of carefully creating a daily single product limited-time group purchase, the mediocrity of group-buying products has led to aesthetic fatigue among users, which is one of the important reasons for the general decline in the conversion rate of group purchases across the country.

According to the ranking of the top ten cities in the national group buying market in October, the five major cities of Beijing, Shanghai, Guangzhou, Tianjin and Shenzhen have always performed well in terms of group buying popularity, especially Beijing, with the number of buyers reaching 13.7695 million in October.

The popularity of group buying in a city directly corresponds to the sales of group buying in that city. Beijing is the leader in group buying with a market share of 35.8%. Shanghai and Guangzhou are in the second tier with 17.0% and 11.5% respectively. The popularity and sales of Shenzhen and Tianjin are reversed. Tianjin is ahead of Shenzhen in popularity and ranks fourth, but Shenzhen is ahead in sales. First-tier cities are the base camp of group buying websites. With a large population base and strong purchasing power, their advantages in the group buying market are naturally more prominent. In the fierce market competition, especially in the current special period of large-scale adjustment of the group buying industry, group buying websites have "sacrificed their cars to protect their masters" to defend the base camp of the group buying market in first-tier cities. In addition, second-tier cities are also a must-fight place for group buying websites. In the ranking of sales cities in the group buying market, the size of the city is naturally a very large influencing factor.

The above chart is a comparison of sales of various group purchase categories in the national group purchase market in October 2011. Online shopping boutiques, catering and food, and leisure and entertainment products continued their consistent sales situation, with market shares of 40%, 21%, and 21% respectively, becoming the group purchase categories with the highest transaction volume. The above statistics do not include the classification of Juhuasuan. According to Lingtuan statistics, the sales of Juhuasuan local services in October were 110 million yuan, a month-on-month decrease of 8.3%. However, Juhuasuan's physical group purchase sales have soared by leaps and bounds, increasing by 30%.

Online shopping for high-quality goods, catering and food, and leisure and entertainment products cover most of the daily life of eating, drinking, playing, clothing, food, housing and transportation. As they are closest to consumers' daily lives, they have become the most popular group buying product categories, and naturally group buying websites offer the largest number of these three categories of products. Travel hotels and beauty and health products are also quite attractive to consumers because of their low marginal costs and relatively large discounts.

Regarding the big picture of the group buying pattern outlined by the data in Lingtuan's "October National Group Buying Market Statistics Report" and Lingtuan's "National Group Buying Website Census Data Bulletin", Lingtuan CEO Wang Qiheng analyzed that on the one hand, thousands of group buying websites are going bankrupt, and on the other hand, group buying sales are soaring; these phenomena fully demonstrate that the group buying market has extremely strong capacity and broad space, so it can sweep across the entire Chinese mainland like a tsunami in just 20 months, impacting every corner of the social economy and cleansing every heart in the social culture where integrity is lacking. To do group buying well, we need to return to the essence of group buying, that is, to be honest and offer truly exquisite limited-time single product group buying to consumers, while controlling merchants to fulfill contracts and guarantee after-sales service. Only under the premise of ensuring quality can we add more categories, and it is not appropriate to make group buying mediocre. The winter and reshuffle of group buying are both necessary processes of refining the rough and selecting the fine.

Wang Qiheng believes that group buying is the beginning of O2O. O2O is not just about online ordering and offline consumption. It catalyzes the evolution of new economies, and its development may exceed the imagination of most people. The painful and happy "group buying" is like a mother who experiences the birth of a new life in the pain of tearing after ten months of pregnancy.