2011 Future of China’s Group Buying Market

China’s Best Group Buying Aggregator!

Web Wednesday #19 | 19th Oct 2011 @ Nearby the Tree

AHN Seunghae
CEO & China’s Group Buying Evangelist
www.LetYo.com

Evolution of China’s Group Buying Market

Analysis of China’s Group Buying market

Future of Group Buying in China?

2011 LetYo.COM All rights reserved. -2- Find the best deals in China, only with LetYo!

July 2010 Oct 2011
Concept Only a platform to sell very Becomes a method of selling products and
limited numbers of service service voucher within a limited time(several
vouchers or products, days) with reasonably discounted price
within a limited time(daily) displaying number of buyers
with extremely discounted
price
Key Features
Number of Normally one, and often Hundreds of items
items sold: several items
Resale of the Not so common Very common
same items:
Period of Sales: Normally one day, and Normally several days, and often ranges from
often ranges from several weeks to months
days to weeks
Discount rate: Average discount at 70%, Average discount at 60%, sometimes at more
often at 80%~99% discount than 70% discount rate
rate

2010’ 2011’
Product Oriented

Hybrid Type

Service Oriented


Previously: Brand new sales Now: Sales method!
platform for e-commerce! Becomes another sales method commonly
seen in E-Commerce or internet sites.


Other Internet
Pure Players Whole sale Merchant
Companies

Small local area
Community MNC Brands
Players

Local Brand
Consumer Info. Vertical Players
Companies

EC Magazines Taobao Shop Owners

SNS Media Companies Service Owners

Product
Portal Mart/Shop
Manufacturers


 Pure Group buying: July 2010

 Community, SNS, Consumer Info., and so on

 EC

 Portals
– Sohu.com( )


 Pure Group buying: Oct 2011

 Community, SNS, Consumer Info., and so on

 EC
 Portals
– Sohu.com( )
 Travel (by Baidu)


Gartner's Hype Cycle characterizes the typical progression of an emerging technology, from
overenthusiasm through a period of disillusionment to an eventual understanding of the
technology's relevance and role in a market or domain.

Source: Gartner (August 2011)


China’s Group Buying Hype Curve

Expectation

2010 2011 2012 2013 Year
Source: LetYo.com (Oct 2011)


Baidu Keywords Search:
Group Buying & Group Buying Websites Aug 2011:
138,000

May 2011:
May 2010: 58,000
2,000

Source: Baidu.com (Oct 2011)


Lashou.com, Groupon.cn, 24quan.com Aug 2011:
260,000

May 2011:
May 2010: 130,000
1,200



55tuan.com, Manzuo.com, Meituan.com
Aug 2011:
140,000

May 2010: May 2011:
1,400 68,000



Alexa Traffic Reach

Source: Alexa.com (Oct 2011)


March 2011: Wu Bo, CEO of Lashou.com predicted that there will only be
5-10 Group Buying Websites left standing in China.

August 2011, Lee Kai Fu, CEO of Innovation Works predicted that only 10
sizeable Group Buying websites will remain operational and profitable.


China’s E-Commerce Market Transactions 2010Q1-2011Q2

Source: iresearch.com.cn (Apr 2011)


Market Size (B2C & Group Buying) Market Size Comparison
(￥ bil) 300 120%
B2C
263.4 Group Buying B2C
Group Buying
250 100% 9%

200 80%
45% 42%
150 138.9 60%
110
100 91% 55% 58%
40%
63.2 62
50 20%

5.9
0 0%
2010 2011e 2012e 2010 2011e 2012e
Source (Group Buying Statistics): LetYo.com (Oct 2011)
Source (B2C Statistics): iresearch.com.cn (Apr 2011)

Size of China’s E-Commerce Market (B2C+ Group Buying)
E-Commerce
Market
Projected B2C
Market(Without
Group Buying)

Group Buying
Market

March 2010 (Group Year
Buying enters
Chinese Market)

Market Size of China's Group Buying Number of Group Buying Websites in
Market (in Billion CNY) China
(￥Bil)
120 110 (US$18 bil) 25,000
21,000
100 20,000
62
80
(US$10 bil) 15,000
60 10,600
10,000
40
5.9
20 (US$1 bil) 5,000
1,980
0 0
2010 2011e 2012e 2010 2011e 2012e
** Group Buying Websites refer to websites
that provide group buying channels.


Revenue of
Group Buying
Websites
Year
2010
2011e
Market Size
of Group 2012e
Buying
110 Websites
(￥ Bil.)
62
5.9

1,980 10,600 21,000
Number of Group
Top 20 Group
Buying Websites
Buying Websites

Goal Chance of Survival


 LetYo.com (former domain: Tuan123.net, launched in April 1, 2010) is the
industry innovator in China’s group buying aggregating industry,
recommending the best daily deals to consumers in China based on their
preferences.
 LetYo.com is a specialized aggregator focused on Group Buying deals, with the
largest Group Buying deals database, coupled with safety features such as site
credibility levels and safety marks. It is the leading source for people to find
the best local deals, collecting more than 120,000 daily deals from more than
2,000 services in China.
 Also, LetYo.com was the first-ever accredited Group Buying aggregator by
China National Credit Information Service Ltd. In 2011 and 2010, LetYo had
been short-listed in Red Herring’s “Asia’s Top 200 Highest-Growth Potential
Tech Companies”, and was also awarded the “Most Trustable Group Buying
Aggregator in 2010” in The Annual China Information Innovation Awards,
organized by China Center for Information Industry Development, a subsidiary
of Ministry of Industry and Information Technology of the People’s Republic of
China.


AHN Seunghae
CEO & China’s Group Buying Evangelist
www.LetYo.com
Weibo: http://weibo.com/anchenghai
iresearch: http://column.iresearch.cn/u/anchenghai/
Linkedin: http://cn.linkedin.com/in/leominis
E-mail: leominis@gmail.com

2011 Future of China’s Group Buying Market

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