Tuangou - Group Buying in China


Published on

An overview of the Tuangou- China's group buying market.

Published in: Business
  • You can also see the idea of group buying (with time based offers) being used in Qunar.com to sell rooms.. it is everywhere.
    Are you sure you want to  Yes  No
    Your message goes here
  • I find a two website for group buying in China Beijing in English, www.mtaroom.com, www.grouponj.com www.cityweekend.com ,Chinese like to copy ,They are crazy.
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Tuangou - Group Buying in China

  1. 1. Tuangou- Group Buying in China Jan 2011
  2. 2. Agenda•  Chinese Group Buying ‘Fast Facts’•  Group Buying Concept•  Group Buying Issues•  Fast Facts- SinoTech Group sinotechgroup.com.cn
  3. 3. The Landscape How does the Group Buying sector look in China?sinotechgroup.com.cn
  4. 4. Chinese Group Buying Fast Facts500 billion yuan (75.4 billion U.S. dollars) was madein group buying sector in China 2010Group buying sites grew dramatically from 4 at thebeginning of 2009 to nearly 1,700 by Dec 2010China International Electronic Commerce Center(CIECC) passed regulations on Oct. 29, 2010stating that group shopping sites should obtainlicenses to participate in the businessSource: Chinese Academy of Social Sciences sinotechgroup.com.cn
  5. 5. Group Buying Adoption Expands in China 10 million Chinese used Groupon-like sites in October 2010, up from 5 million in JulyiiResearch Consulting Group sinotechgroup.com.cn
  6. 6. What’s dominating the Offers? sinotechgroup.com.cn
  7. 7. Looking Good for Make-up sinotechgroup.com.cn
  8. 8. The Chinese Group Buying Sites (Main ones) and……Groupon/Tencent JV is rumored to be announcing soon sinotechgroup.com.cn
  9. 9. Lets ‘deep dive’ How Does Group Buying Work?sinotechgroup.com.cn
  10. 10. Group Buying ConceptEach deal is only available for a limited amount of time(1-3 days normally)Users can check the group buying websites orsubscribe to SMS or email notifications. sinotechgroup.com.cn
  11. 11. Typical Group Buying Rules Typical structure1.  Unless a minimum number of deals are purchased, nobody gets it!2.  Once the target set by the merchant is met, the deal is triggered sinotechgroup.com.cn
  12. 12. It’s About the Group Spread the WordThe whole idea is to provide great discounts for bulk/group purchases. Social Media has become a key tothis model. sinotechgroup.com.cn
  13. 13. Final Thoughts on The Challenges for Group Buying Sitessinotechgroup.com.cn
  14. 14. The Challenges for Group Buying Sites-  Consumer Retention is Difficult…-  You get deal driven consumers not long term customers, you don t own the email and customer retention is low-  Limited network effect because the deals are one-off-  Clones don t require exclusivity on deals sinotechgroup.com.cn
  15. 15. The Challenges for Group Buying SitesThe number of players means commission levels arebeing eroded far from the 40-50% that offers siteswant to achieve down to 0% just to get the deal. Thiswill continue until a clear leader emerges.Some large Chinese Search & Portals eyeing thissector and can make significant inroads in a shorttime by leveraging their netizen and advertisingbase. sinotechgroup.com.cn
  16. 16. Humble SuggestionsThis is a highly competitive sector with a low barrierto entry.It’s all about the ‘offer’ – focus on securing thebest valued products and venuesWithout the offer you having nothing but atrafficked sites (or not) that is not making salesSuggestion: Build the distribution list first, then usethat as leverage to get and offer the bestproducts/venues sinotechgroup.com.cn
  17. 17. About SinoTech Group sinotechgroup.com.cn
  18. 18. SinoTech Group - Fast Facts•  Consists of two brands: Digital Jungle (Digital Agency) & SinoTech SIP (Social Media Tech/ Consulting)•  Heritage in software development•  95 employees (combined)•  Global reach•  Independent•  Offices in Beijing, Shanghai & Hong Kong•  Founded in April, 2007 sinotechgroup.com.cn
  19. 19. Thank you - Dr Mathew McDougall | @sinotechiansinotechgroup.com.cn | @sinotechgroup sinotechgroup.com.cn