2011 Future of China’s Group Buying Market

AHN Seunghae

CEO & China’s Group Buying Evangelist

www.LetYo.com

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

China’s Best Group Buying Aggregator!

http://www.letyo.com/

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

Evolution of China’s Group Buying Market

Analysis of China’s Group Buying market

Future of Group Buying in China?



July 2010 Oct 2011

Concept Only a platform to sell very limited numbers of service vouchers or products, within a limited time(daily) with extremely discounted price

Becomes a method of selling products and service voucher within a limited time(several days) with reasonably discounted price displaying number of buyers

Key Features

Number of items sold:

Normally one, and often several items

Hundreds of items

Resale of the same items:

Not so common Very common

Period of Sales: Normally one day, and often ranges from several days to weeks

Normally several days, and often ranges from weeks to months

Discount rate: Average discount at 70%, often at 80%~99% discount rate

Average discount at 60%, sometimes at more than 70% discount rate


2010’ 2011’

Service Oriented

Product Oriented

Hybrid Type


Previously: Brand new sales platform for e-commerce!

Now: Sales method! Becomes another sales method commonly seen in E-Commerce or internet sites.


Pure Players

Community

Consumer Info.

EC

SNS

Portal

Other Internet Companies

Small local area Players

Vertical Players

Magazines

Media Companies

Mart/Shop

Whole sale Merchant

MNC Brands

Local Brand Companies

Taobao Shop Owners

Service Owners

Product Manufacturers


Pure Group buying:

Community, SNS, Consumer Info., and so on

EC

Portals

– Sohu.com( )

July 2010


Pure Group buying:

Community, SNS, Consumer Info., and so on

EC

Portals

– Sohu.com( )

Travel

(by Baidu)

Oct 2011








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)


Year 2010 2011 2012 2013

China’s Group Buying Hype Curve

Expectation

Source: LetYo.com (Oct 2011)


Baidu Keywords Search: Group Buying & Group Buying Websites

May 2010: 2,000

May 2011: 58,000

Aug 2011: 138,000

Source: Baidu.com (Oct 2011)


Baidu Keywords Search: Lashou.com, Groupon.cn, 24quan.com

May 2010: 1,200

May 2011: 130,000

Aug 2011: 260,000



Baidu Keywords Search: 55tuan.com, Manzuo.com, Meituan.com

May 2010: 1,400

May 2011: 68,000

Aug 2011: 140,000



Source: Alexa.com (Oct 2011)

Alexa Traffic Reach






2011年3月拉手网CEO吴波预测今年会

是一个分水岭，行业将会进行大洗牌，我预计可能今年年底全国性的团购平台就只会剩下5到10家左右 2011年8月李开复也预言：我对中国的预测：1）1000+团购血拼后会剩下约10家有规模、能盈利的

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)


63.2

138.9

263.4

5.9

62

110

0

50

100

150

200

250

300

2010 2011e 2012e

B2C

Group Buying

0%

20%

40%

60%

80%

100%

120%

2010 2011e 2012e

Group Buying B2C

91%

45% 42%

58% 55%

9%

Market Size (B2C & Group Buying) Market Size Comparison

(￥ bil)

Source (B2C Statistics): iresearch.com.cn (Apr 2011) Source (Group Buying Statistics): LetYo.com (Oct 2011)


Year

Size of China’s E-Commerce Market

Group Buying Market

Projected B2C Market(Without Group Buying)

E-Commerce Market (B2C+ Group Buying)

March 2010 (Group Buying enters Chinese Market)



5.9

62

110

0

20

40

60

80

100

120

2010 2011e 2012e

1,980

10,600

21,000

0

5,000

10,000

15,000

20,000

25,000

2010 2011e 2012e

(US$1 bil)

(US$10 bil)

(US$18 bil)

Market Size of China's Group Buying Market (in Billion CNY)

Number of Group Buying Websites in China

(￥Bil)


** Group Buying Websites refer to websites that provide group buying channels.


Number of Group Buying Websites

Market Size of Group Buying Websites (￥ Bil.)

Top 20 Group Buying Websites

Year 2010 2011e 2012e

1,980 21,000 10,600

5.9

110

62


Revenue of Group 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.

Weibo: http://weibo.com/anchenghai

iresearch: http://column.iresearch.cn/u/anchenghai/

Linkedin: http://cn.linkedin.com/in/leominis

E-mail: [email protected]

AHN Seunghae

CEO & China’s Group Buying Evangelist

www.LetYo.com

http://weibo.com/anchenghai

http://weibo.com/anchenghai

http://column.iresearch.cn/u/anchenghai/



http://cn.linkedin.com/in/leominis

http://cn.linkedin.com/in/leominis

mailto:[email protected]

http://www.letyo.com/