What goes up must come down, and China’s group buy sector has been busy learning that the hard way for the past nine months. According to the latest data from group buy site tracker Tuan 800, China’s group buy sites are down 2,082 since last September, the high point in group buy fever, when the total number of sites was more than 5,000. That’s a more than 40 percent drop.
At the same time — and certainly not unrelated — consumer interest in the group buy model has also dropped. Income from transactions for the sites that still exist has dropped more than 50 percent compared to the first half of last year. The number of transactions has also dropped more than sixty percent. So group buy sites today, on average, are making less money from fewer transactions than they were last year. No wonder more than 2,000 sites are gone.
How many group buy sites will be left a year from now? The trend does not look good. Like many other sectors of China’s internet, the market seems to be consolidating, and the end result is going to leave an awful lot of people out in the cold.