After 2 years wild growth, recently “merging”, “acquisition” and “strategic cooperation” have become the keywords in the discussions related to the Group-buying websites in China.
According to the Dataotuan （www.dataotuan.com）statistics, the total revenue of the Chinese group-buying market in 2012 Q1 is around 4.5 Billion Rmb. (Pure online shopping deal sites are excluded in the Dataotuan statistics)
The Top 20 deal sites, accounting for 95% of the market, fall into 4 levels as demonstrated below:
Deal sites from the 4 levels show interesting features in terms of revenue, share, trend and pricing strategy.
1． The top sites have found their position, but changes are expected.
1st Level (Top 4)：Meituan, 55tuan, Dianpingtuan, Lashou
The first level deal sites have consolidated their position as the market leaders. Each of them takes 10-17% of the market, with a monthly revenue of around 200 million Rmb. Meituan & 55tuan have over 200 million Rmb monthly revenue.
Among the top 4 deal sites, Dianping is the only one whose business is not purely daily deals. Having restaurant listings and the reviews as their basis, Dianping is influential with regard to both the merchants and the users. Additionally daily deal part of Dianping is known for its strictness in deal quality control.
Since the beginning of 2012, Dianping’s monthly revenue has been growing at 30% per month. If it continues like this, soon it will become the 3rd website with more than 0.2 billion monthly revenue, following Meituan & 55tuan.
2nd Level (Top 5 – 9): 58tuan, Nuomi, Juhuasuan, Ftuan, Manzuo
The 2nd Level consists of the same 5 members that often change positions in the past months.
Those 5 websites have a monthly revenue of 80-100 million Rmb, in total they account for 27-29% of the market.
3 websites (among the 5) are extended businesses of e-commerce, Life-service or SNS websites. Their future development and market share will, to a big extent, depend on the support they can get from their mother companies.
3rd Level (Top 10 – 17): Didatuan, Ayatuan, Go.cn, Gaopeng, 24quan, Pintuan, Ganji, Juqi
There are 8 members in the 3rd Level. They have a monthly revenue in between 20-50 million Rmb. They have shown that they can be competitive. Almost all of them have once ranked in the top 10.
On the other hand, the 3rd Level websites will possibly be bought or merged by the 1st /2nd Level sites, if they can’t improve their rankings.
This kind of merging has started happening: in mid-April, Ganji sold its Group-buying channel to 55tuan; 2 weeks later, there are ongoing rumors that Gaopeng will be merged with Ftuan.
4th Level (Top 18 – 20): Liketuan, Shuangtuan, Tuanweihui
The deal sites in the 4th Level account in total for 3% of the market. Each site has around 15 million Rmb monthly revenue.
The 4th Level deal sites are more focused on online shopping deals, while they still have a small percentage of local service deals.
2． The different pricing strategies of the top Deal sites
In Q1 2012, the average deal price is 142 Rmb, and the average discount is 62%. These numbers hardly change from month to month in Q1.
The following major deal sites have different pricing strategies. In Q1, each stayed true to their own strategy:
All the price/discount comparison is based on the group-buying market average level. The pricing strategy of the deal site is related to its traffic, users’ profile, main deal category, etc. Please check the full Q1 report from Dataotuan for more findings in terms of deal websites’ pricing strategies.（http://www.slideshare.net/dataotuan/chinese-dailydealsamarketanalysisq12012 ）
The following chart shows the relation between the pricing strategy and the deal site levels:
Deal sites from the 1st & 2nd Level offer a smaller discount than average.
The deal sites from the 1st & 2nd Level are in general offering better quality deals; they don’t overuse big discounts to attract buyers.
For these websites, the actual deal prices (average) on those show two tendencies:
A lower than average price, such as Meituan & Manzuo;
A higher than average price, such as Dianpingtuan & Juhuasuan.
Deal sites from the 3rd & 4th Level offer a bigger discount than average.
No doubt, the deal sites from the 3rd & 4th Level are much less competitive compared to the 1st & 2nd level. Besides the bigger discount, they also offer a lower (than average) price.
Price and discount are in general the key factors for group-buying deals, especially the deal sites from the 3rd & 4th level have to make use of these to attract more buyers.
But according to Dataotuan’s observation, the best sold deals in general have a higher price than the average level, with a smaller discount. It’s about quality not just price that wins consumers. The quality of a deal consists of flexible terms, trustworthy merchant and preferably several redeemable locations. To know more about the analytics of Top Deals, check the previous Dataotuan report here
Dataotuan.com is a unique daily deal aggregator and analytics platform in China and the rest of Asia.
It collects daily more than 8000 new deals from over 300 Chinese cities and thousands in the the rest of Asia.
Dataotuan.com was started with 2 goals in mind.
1/ To recommend the best deals to our users based on where they are, what they like and when they want it as well as giving them tools to manage them
2/ To analyze the deal data in order to find out what constitutes the best daily deal
Dataotuan.com helps Daily Deal websites figuring out which deals to offer and where.
It helps analysts and investors understand the market dynamics
Dataotuan provides advice to merchants about which deal websites to cooperate with.
Dataotuan aggregates and analyzes the daily deal markets in China (dataotuan.com) Singapore (singapore.dataotuan.com), Malaysia (malaysia.dataotuan.com), The Philippines (philippines.dataotuan.com), Taiwan (taiwan.dataotuan.com), Australia (australia.dataotuan.com) and New Zealand (newzealand.dataotuan.com)
More countries will follow soon as our goal is to cover all Asia and then the rest of the world.
The presentation can also be found on Speakerdeck