Original Aurora
Grounp buying will not against the trend by xiazihui
Getting to the spring breeze of the mass, suddenly in the fall of 2011 the leaves fall stopped blowing.
As the world’s largest Groupon stand in September 6, road shows, announced the cancellation and plans to put off the ipo, the bank industry almost overnight prematurely ushered in the winter. The shake handshandle of China in the early winter network. According to an orange hotel market director ChenZhong revealed, several international investment Banks had to shake handshandle nets do an IPO, but now the preparatory affairs are all exit.
In the public financing blocked at the same time, large stand more had continued losses.
The group nets co-founder, vice President WangHuiWen on September 13 accept the China news weekly “reporter to interview, said the estimated China ranked in the top 10 stand are in losses, beauty state group nets each month of the loss at around 12 million. He estimates that advertising more, and number of employees more litters group and shake handshandle nets loss sure more than beauty group nets. Groupon established in recent three years, accumulative total loss more than $540 million m. In the second quarter of this year, and continues to lose money more than $100 million. The company existing valuations are, in fact, is down about twenty percent in the first quarter of this year, only $3.2 billion.
stand once because “to money fast” and is considered to be the most promising Internet business model of one. But, standing naturally the profit pattern of defects, plus the low threshold easily imitate led to stand fierce competition, all this finally this fall in the bear bitter fruit: China stood below 10%, Groupon40 % or so far should not profit margins, to adapt to the requirements of the investors. A stand big integration will surely come, and can survive the winter stand who will be the last laugh, is still unknown.
Failure the
The bad news is always spread faster.
September 7,, the first and biggest stand Groupon, in the stock and the performance of the company unrest canceled a scheduled early September at its initial public offering (IPO) road shows. The company also announced, will reconsider this round of $750 million worth of financing the schedule.
The move a team of industry, the fear in long after the depression, finally found out of export. Critics argue that the already expansion to 43 countries giant, signs decline has shows. Groupon need to rely on a huge, the high costs of the marketing team, to continue to attract and retain customers businessman, the business model can continue, it is very doubtful.
Not only stand in the cold wind of Groupon website. In the previous ten days, also is August 27, the famous American social network Facebook announced in a few weeks, will shut down its world business Deals. And four months ago, namely the this year on April 25,, ambitious Facebook has just announced the team into business in America, such as Atlanta five cities began to test service Groupon and LivingSocial Deals, and compete.
Facebook and Groupon may feel the figures behind with cruel: according to the measure of the global Internet traffic service benefit the Experian Hitwise) (the latest statistics, the major stand has continued in July and August flow shrink. Two of the main U.S. giant Groupon and LivingSocial in late August, all the traffic than the annual peak in June fell more than a quarter, of which Groupon decreased by half of the traffic.
And similar flow down, also appeared in the north American market of Canada and the Philippines in southeast Asia.
Following the fall of flow rather, is the sales. According to the American team monitoring trade group buying information website CouponHQ statistics, 7, in August, the Groupon and LivingSocial’s sales team is present continuously high to nearly 5% of shrinkage.
“The same web site is more and more, e-commerce group has started to waking feel numb.” coupons From the PE professional analysts such analytical people’s consumption behavior.
In China, the bad news of the loss of the panic. Common losses for those who have not last the financing stand unsustainable. According to China’s Internet monitoring the authority of the Internet data center survey, by August, China has more than 5500 station house, on an average day from the new home, but also have 10 the same amount of stand to destruction. In recent months, there have been nervous capital chain station to find beauty group nets hope from acquisitions, meanwhile, some station chief to shake handshandle nets President lu, looking for cooperation.
The group nets co-founder, vice President of the China WangHuiWen “newsweek” revealed that, come to the group’s not only have the scale of the local relatively small stand, and even the larger national stand, “for a long time, the talks have only because valuation, and after the division of the purchase such specific problem and differences, so has not yet
Now, the worry is no longer stand leader, but the whole team can listed industry whether to by a flowering but not only the extreme cold results.
Gene defect?
stand today’s dilemma in this business model, and the birth of the days of buried the declination.
In fact, and Bill Gates of Microsoft empire together to create the Paul Allen, was in 2000 had a company called “investment We Commerce (We sale)” site. The network platform have now standing almost the same and the mode. It through the Internet to buy the same merchandise called get a discount, and the more people buy, the greater the discount.
However, the magic of a web site at that time had come from amazon this powerful retail rival. It didn’t last a year. “We Commerce” failed, until the end of 2008, only use social networking with Groupon way, to let model moment broke out.
For bulk order business model research shows that, the bank is the result of the birth of the network, especially social networking moment aggregation function. stood together like consumer roping phase, form polymerization effect. At the same time, merchants can also through the quick, a large quantity of excess supply, recycling sold more capital.
“In fact quite a few shops sell in bulk order is the rest of the inventory, such as in the days of the beauty shop.” time meet gap The Wharton school of business marketing professor Davy rubenstein had been so summarize a bulk mode. “Discount offers, for buyers and sellers is a win-win.”
It is found that the social networking sites of shopping than organization social activities more profitable, Andrew mason and Eric Leigh, before the strike by Groupon gathered in a short period of the purchasing power of the great, within three years from the original creation of $1 million fund, to expand into now has about 120 million users, total valuations lose about $16 billion. A bulk mode also overnight became popular in the world, imitators and competitors into geometric ratio growth, since 2009, from the northern hemisphere of the South Africa, Russia to the southern hemisphere the favourable activity station from sports tickets to a foot massage experience, everything.
However, the negative effect of the polymer effect also gradually revealed.
“Many times to consumer, it is one-time consumption. Also there are many businessmen take this way replace advertisement and promotion costs, one-time after the advertising, short-term inside is no longer have a second time.” Rice university school of management of Houston, the professor was strange and accept the DORA in China “newsweek” interview.
The researchers in March this year just to complete a two-year investigation and research, investigation followed more than 300 home five major cities in the United States in stores and trade consumer. The results showed that eighty percent of consumers said in appeared, and then they’d prefer to go to a new shop to buy a bargain, and not to be a repeat customer. Less than half of the businessman said they wanted to and website team cooperation, but at the same time also has twenty percent of the merchants made it clear that won’t return to.
DORA strange and professor considered, this is trade structural weaknesses.
Originally just by to free businesses advertised, but now market saturation, let all the transactions are fallen, DORA, the professor says, “excessive competition is the natural enemy of industry group buying.”
In the Chicago business a stationery shop RON foster’s statement also confirmed that. He told the China news weekly “, my store had participated in two different stand activities, but echo in the imagination and no good.
“In fact only when we initiative hope, to clear stocks will think of. Customers think so, if we don’t clear goods, they will go to the Internet to find other is doing the stores.” Foster said.
The threshold is too low, and excessive competition was also thought to be one of the weakness of station. Even in the Queensland, Australia station also appeared super saturation phenomenon. Residents, this year’s Holly grace who took part in the two, as a result be household company cheated out a $69, a time for waiting in line of the experience of the foot and directly give up too many women the a $116 buys.
“Everyone to buy, but the businessman but it offers so many service, we spend money, but nothing to buy.” Grace’s complained.
“So vicious competition down, the bank may precipitate consequences will be, the consumer is greedy for low the price of, the bank low to cannot again low, finally difficult to find the price can no longer stand the merchants of match. Then, the supply chain will be a problem.” DORA strange and said.
And to this team is a one-way street continue to development.
In addition to the United States with the defects of the same pattern of China stood outside, still have to make some adapt to the change of China’s reality, and it is this localization change, caused its gross margin more closely below markets such as the us.
One of the typical of the change is a large Chinese stand universally implemented refund system. As China’s first online stand, the group nets in 2010 introduced the “first” and “seven days overdue refund not refund” and other consumer spending BaoZhangZhe security measures, including shake handshandle nets, then stand in succession to follow up.
And in the United States, consumers in after the product or service, if no consumption, its and advance funds will not be returned, in the shake handshandle nets President lu, it seems, this is also the Chinese stand gross profit margin of less than 10%, far below the 40% gross margin Groupon one of the reasons. Lu, the above is not expected to return the money provided Groupon40 % precipitation of the gross margin from 10% to 15%.
Also, because of excessive low price strategy stand, leading to merchants of goods and services, the price down sharply DaoBi group buying products had also another problem: the low level of sinicization of service, and uneven.
According to founder XuMaoDong revealed that litters group in the first half of this year, the domestic business TouSuLv for 40%, means that nearly half of the users for are not satisfied.
Who can survive?
The winter came, but about early competition continues, and will become extremely deadly. “BaoTuan” trend seems to do not resist.
“The capital chain the stand, and ultimately to stay because merchants and consumers and it closed down.” DORA’s professor and said.
There is some speculation points out, the will come out at the end of this year. For small speaking, cold winter will be a torment, perhaps pull the plug is safe choice. However, for the resources of the Internet giant is strong, attention to seem to be the rob market opportunities.
Relative to the sound is in question Groupon, its the biggest rivals but LivingSocial speed up the pace after the former in in the international market share. The latter through the investment risk involved, acquired from Asia to Europe station. The local nations
The second big station across the founder Tim Mr Shaw nice in August 29 interview, deny industry pattern existing risks, they see more is a chance.
“Our business is only just beginning. If I put the experts that truth, we would never as has now this development.” He said in the U.S. media. Similarly, although each month loss at $12 million, the group nets co-founder, vice President WangHuiWen doesn’t seem worried, “you want to profit, now can profit ah, do store is easy to profit, if want to do wal-mart, fast profit natural is not easy.” WangHuiWen even for Groupon can’t listed as good, because this also “reduces the a rival”.
While the cold wind, the world’s bleak major website, heats up to the existing market share of possession. Including Google, America online dating sites FriendFinder, China’s tencent, still chasing the team website market development potential. Among them, the Google plans to use its smartphone users, with Google’s positioning resources services to build local residents of the market service.
Google has opened in July in the United States to the Google group buying services. Although two months, but Google to continue the loss not only not stop trying, is further acquisition of the native American two quite popular web site of comments on.
China’s leaders are like pagans sharpening team. In July, the a conference, the group had to the media displayed network bank account to nearly $400 million cash reserves, in response to the cold of the winter capital. Then, the nets in group B completed August rounds of financing the investors get sequoia capital, alibaba and aurora borealis, etc to the support.
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