The booming group buying market - Helen Wang

Helen Wang

The group buying market in China is steaming hot, but without Groupon as a major player for the time being. Helen Wang analyzes in Forbes the chances of the US company in the world's largest internet market.

When a bellman in a Shanghai hotel advised me to get a breakfast coupon from Lashou.com, a Chinese group-buying site, for less than half the price, I knew that social commerce had gotten into the hearts and minds of Chinese consumers. It’s not surprising that thousands of group-buying websites sprung up in less than a year in China’s chaotic cyberspace. According to JP Morgan, the group buying market grew from zero to more than $150 million in 2010, and is expect to reach half a billion dollars in 2013...

Gaopeng [the Chinese name of Groupon] also faces tough competition from Lashou.com and other group-buying sites. Lashou is founded by a seasoned Chinese entrepreneur and backed by U.S. venture capital firms SGR and Milestones – both are experienced in Chinese technology ventures.  Its momentum is strong after raising $110 million in series C funding in April. So far, Lashou seems to have done everything right. It is expanding rapidly to 2^nd and 3^rd tier cities, setting up call centers and logistics, and enhancing customer services.

Gaopeng certainly has an uphill battle in China. Some analysts have already written it off to a fate similar to eBay, Yahoo, and Google (not in bad company, all world class organizations  ).

However, China’s Internet market is too significant to give up. In less than a decade, China’s Internet users could reach as many as 750 million and China’s consumer market could reach $16 trillion. A burgeoning middle class has fueled a consumption boom. Retail marketplaces are spreading in urban areas like wildfire. E-commerce has been growing 60 percent per year in recent years.

More advises for Groupon  in Forbes.

Helen Wang is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch.

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