Chinese group buying site 24Quan, once in the country’s top five deals sites, has been in the rough for some time now, and it suspended operations back in October. So the following shouldn’t come as a huge surprise to anyone: the site has now apparently shut down for good. The company’s site now appears to be inaccessible, and there are doubts about whether the company will be able to pay all of its outstanding debts with merchants.

24Quan founder Du Yinan (who we talked to about the company’s troubles way back in November of 2011) has yet to comment on the closing, and a 24Quan investor told Sina Tech that the board would need wait for instructions before speaking to the media.

Given that, I suppose it’s technically possible the company could rise, phoenix-like from the ashes to take on the world of group buy in China, but I wouldn’t bet on it. After months of inactivity, those ashes are going to stay ashes, and Du Yinan — like so many entrepreneurs — will move on to his next great idea.

[via Sina Tech]

Although Nhom Mua, Vietnam’s leading group-buying site, is finally back online, the news of its investigation by authorities – and the website takedown – has sent shockwaves throughout the startup community and Nhom Mua’s many customers nationwide. With some customers are left stranded, unable to use their coupons nationwide, it harkens to larger Vietnamese economic controversies. Now, there seems to be two directions that the online group-buying market could go in Vietnam.

Will there be an increased skepticism of web companies, as evidenced by consistent low spending in online advertising, a market that group-buying sites are eager to penetrate? Or will Nhom Mua’s brief fall signal a chance for the mass of Groupon clones to jump in?

At last count, in November 2011, there were 97 Groupon clones in the market with 10 players at the head of the pack. Nhom Mua was at the front along with Muachung.vn. The success of Nhom Mua was not just paved by its relationship with Diadiem.com, the leading local location-based web service, but also because of its solution to a still-looming problem in Vietnam: e-payment systems. Nhom Mua adapted to a market that has still not implemented widespread credit card payments by instead using a cash-on-delivery (COD) system.

A recurring theme I’ve been seeing at conferences in Saigon is e-payment is one of Vietnam’s greatest obstacles to growth in the online space. Successful models thus far have ignored the problem by going straight to COD. With Nhom Mua’s recent fall from grace, and the baby Nhom Muas with a fresh market to jump into, it’s only a matter of time before new companies rise into prominence. An increased skepticism of the online space is low on the list of dangers though. With the internet penetration at 34 percent and an increasing portion of them moving into social media, the online market is getting bigger and bigger. Although companies and people may not be trusting of web content, they are learning more and more to be dependent on it.

The problem that these baby Vietnamese Groupons face is a surging interest in e-commerce and what some believe are key fallacies in the Groupon business model. E-commerce provides small and big businesses with access to the same customers, and also bring discounts to consumers. Businesses have also been learning the hard way that discounts on their products are negatively impacting public perception of their goods and services. Whether or not these new group buying players can come into the market, (or Nhom Mua will salvage its reputation) and deal with new business models that are more appealing to businesses, remains to be seen.

Group-buy service provider Dealised has announced that it has sold off its European operations to Group Commerce Inc, and also has struck an agreement with advertising company Granton Asia, a regional arm of The Granton Group.

The latter will mean that Granton will implement Dealised e-commerce platform in creating daily deal sites around the Asia region, specifically in countries like the Philippines, Thailand, Malaysia, Indonesia, and Hong Kong.

Readers may recall that Dealised acquired Lokaly, a Hong Kong-based group-buy solution provider, a few months back. At the time, CEO Jonathan Marchbank noted that Dealised’s Hong Kong team would “help it grow right across Asia.”

China looked like an interesting market, and we wondered if that might be part of the company’s long-term Asia plan. Given how the group-buy market has fizzled in the country, we inquired about where China factors into the Dealised vision. The company’s general manager, Jay Ng, tells us:

We’re interested in any market that offers good partnerships with publishers, retailers, and media companies, and where the consumer is ready for group-buying… In North Asia, Hong Kong and Taiwan look good. In SEA, Thailand, Indonesia and The Philippines are very interesting. China is promising, but is in the middle of a huge, much needed, consolidation with the consumer sites. There is a crisis of confidence in the group buying model on the part of both consumers and merchants.

Such caution is probably wise considering the state of group-buying in China right now. Ng adds that the company intends to explore opportunities all over Asia, and they’re confident they can find the right partners at the right time.

While most of the far-too-numerous daily deals sites in China are going through a rough time, the woman-oriented group buying website MaiHao has today announced that it has secured some major investment funding.

The VC backing amounts to US$5 million, coming mainly from the Washington-based ICI an unidentified US investment firm. MaiHao’s CEO and co-founder, Hong Miaolong, hasn’t explained to the media how the funding might best be spent or invested.

[UPDATE on March 3rd - After checking with ICI, it is not the source of the investment funding, and seems to be a mistranslation on my part. The local media seems to identify only an unspecified US investment firm].

The MaiHao site – at 17mh.com – sells discounted deals on products such as make-up, skincare products, and clothing. The company guarantees that all its branded products, such as Clinique and L’Oreal, are genuine items, which can be a serious issue on some group buy and e-commerce sites in the country. There are plenty of other deals sites taking a similarly specialist approach – in terms of focusing on women and a certain genre of products – such as Rakuten China’s group-buy portal which is a joint-venture between Rakuten (JSD:4755) and Baidu (NASDAQ:BIDU).

The timing for the MaiHao funding news is pretty apt, as today is International Women’s Day.

[Source: JRJ Finance - article in Chinese]

When we looked at the most recent stats last month for the group-buy market in mainland China, we noticed some interesting phenomena, such as the top three sites – Meituan, 55Tuan, and Lashou – now look like an established hierarchy, and movie tickets were the hottest leisure deals.

And now the source of those stats, the aggregator and deals analysts DaTaoTuan, has made an infographic showing why movie coupons are such an important differentiator for a daily deals site, potentially bringing in over half a million sales worth over 10 million RMB (US$1.58) to a single company. Movie ticket deals now account for 13.4 percent of all revenue in the mainland China group-buying sector.

In summary, before looking at the infographic below, it seems that Meituan and 55Tuan are making the biggest piles of celluloid-derived cash, with Meituan bringing in 13 million RMB ($2.06 million) in the space of nine days with its movie deals across 44 Chinese cities. The infographic astutely points out that cinema tickets are way expensive compared to the usual pirated DVDs here – like, 70 RMB tickets versus 7 RMB discs – so big discounts are proving to be a great way for deals sites to bring in new customers and reconnect with old ones as well.

[Source: DaTaoTuan’s blog]

Group-buy aggregators and analysts Dataotuan are back in action, tracking 125 deals sites throughout January to find the latest trends among consumers in China, and to see how the sites themselves are performing.

In summary, this time around we observe that movie ticket deals are a new craze among buyers, Groupon’s (NASDAQ:GRPN) Gaopeng.com is failing and flailing, and for the first time we meet some shopping-only deals sites, such as Xiutuan, that avoid the usual array of restaurant offers. In the broader market, we finally see some stability as the top five sites, led once again by Meituan, retain their positions.

Here are some of the key slides from Dataotuan’s newest monthly report:

Market Share in January

After more than a year of tumult in this group-buy sector, we now see a clear hierarchy, led by Meituan and 55Tuan, just as it was at the end of December. Meituan is indeed consolidating its lead.

Look down to 14th position on the pie chart to find Gaopeng, Groupon’s official venture in China. Its market share slid slightly once again; now at 2.1 percent, it’s down from 3.2 percent last October, and has been cut in half since its 4.2 percent share of the pie last August.

Number of Deals Actually Sold

The number of deals that are actually sold is, of course, a good indicator of their quality. In this respect, the two market leaders show that they also offer attractive deals. In this area, we almost always see strong form from Dianping and the Renren-invested Nuomi, both of which always seem to know what their customers want. You’ll note that Gaopeng was offering a lot of deals, but it – once again – failed to turn that into a large number of sold items.

Movie Tickets in Demand

Movie tickets deals are now – excuse the pun – a hot-ticket item on many deals sites, growing to now account for 13.4 percent of all revenue in the mainland China group-buying sector. It is therefore the largest subcategory of leisure purchases.

Shopping Deals

The report covers, for the first time, shopping-only deals sites, which tend to sell stuff like make-up, watches, clothes and accessories, and not items like restaurant deals, holidays, etc. And so we encounter some new names: Xiutuan.com seems to be the market leader, though this market is clearly less stable and it fluctuates each month. Tuanxiu seems pretty solid as well. But this sector does have a few recognizable names, such as the Walmart-invested Yihaodian, and the cosmetics-oriented Miqi, which last year attracted some VC funding. Both those are mainly conventional e-commerce sites which also do daily deals on the side.

Check out the full report as a slideshow at the source link below.

[Source: Dataotuan’s blog]

Unlike the common group-buying websites in China, Handsup.cn has an interesting new spin. It is the first domestic site that allows consumers to request deals. Seeing goods or service which they want, users can create and promote their own deals, turning a local business’s customers into its biggest advocates. It will be interesting to see if it’s successful.

According to Handsup, it takes just three steps for consumers to request a deal:

1. Find an item that you’d like to buy. Other e-commerce sites like Taobao or Amazon China can be used for ideas.

2. Submit the idea along with a photo, pick a realistic discount amount, and add a deal description. Here it goes through a review process behind the scenes. If the deal is approved, you will see it in action on the site. Now you can wait for it to gain traction, or rally people to sign up for the deal by sharing it online.

3. Again behind the scenes, if enough people are interested in the idea, Handsup reps will contacts businesses with the details, and if a business approves it, the deal is on. Now you can buy it with a nice discount – such as the USB-powered speakers pictured below that come with a 35 percent discount.

The more people 'hands up' a deal, the greater the discount will become.

The advocator of the deal will get a reward of 100RMB for each deal that goes on sale, no matter if he or she buys it.

There are three levels of price for each deal (pictured above); the more people vote – or ‘hands up’ – the deal, the greater the discount could become. This is how Handsup inspires social sharing and word-of-mouth marketing in its innovative group-buying model.

This consumer-to-business (C2B) model – in contrast to the usual B2C on the likes of Meituan and Lashou – is so new in China that nobody knows whether it will be success or not. Liu Lei, one of the founders of Handsup, says that his website offers a stronger deal alternative than those normal group-buying sites, and lower prices as well.

Currently, the items on Handsup.cn range from clothing and gadgets, to food and cosmetics. Its revenue model is more traditional, though – getting a cut of the daily deals that are bought by its users.

[Source: Tech2IPO - article in Chinese]

China’s second-largest e-commerce site, 360Buy, continues its very aggressive expansion today with the launch of a hotel booking site. It’s quite a break away from the company’s usual focus on books, electronics, and clothing, and is a significant threat to the country’s main travel services, Ctrip (NASDAQ:CTRP), Elong (NASDAQ:LONG), and Qunar. The B2C e-commerce site started selling plane tickets last summer, and so now it has augmented its offering to the point that it has a fully-fledged travel service.

The new portal, at hotel.360buy.com, also includes discounted daily deals on hotel bookings, making this something of a challenge to the country’s leading group-buying sites, Lashou, and Meituan.

360Buy said in a press release accompanying the launch that is has 20,000 hotels on the new site, across mainland China, Hong Kong, and Macau.

In recent months we’ve seen the company make acquisitions, plan to open an e-book platform, and launch a luxury brand clothing store. It’s all a part of 360Buy’s stated aim to expand well beyond its initial product range and challenge Alibaba’s Tmall.com, the current market leader, for top spot in China. It may seek to IPO in the US, if economic conditions improve, in 2012.

The Indian startup Freecharge.in has announced this afternoon that its has secured funding worth Rs. 20 crores (US$4 million) from Sequoia Capital – the second time it has been given a cash boost by the same VC firm.

Freecharge allows users in major cities in India to get free coupons – either by mail, or in the form of e-coupons – when they pay via the website to top-up their mobile, data, or TV credit accounts. It’s similar to the group-buying/daily deals model – as pioneered by the likes of Groupon (NASDAQ:GRPN) and Livingsocial – except that the goodies actually are free. The service claims to have grown to 1.5 million users since its inception just 18 months ago, and to be one of India’s highest transacted e-commerce sites.

The company says that the new injection of funds from Sequoia will be used to add new products, add merchants as partners, and to advertise the service to consumers.

Sequioa Capital’s managing director, Shailendra Singh, said in the accompanying press release:

Freecharge has created a new online model, enabled by couponing. We were attracted to Freecharge because it isn’t another daily deals site, but one that leverages a very localized phenomenon of pre-paid mobile and DTH [direct to home] services, to generate demand for large merchants. […] Some of the e-commerce merchants that offer coupons on Freecharge have seen their sales grow 50 to 100 percent due to Freecharge alone.

Merchants currently participating in the coupon deals on Freecharge include McDonald’s, Puma, and Best Buy.

Despite a tough year for many group buying sites in China – including lots of terrible publicity such as huge spikes in customer complaints – lots of consumers turned to such deals sites for their most important event of the year: Chinese New Year dinner.

The deals aggregator Tuan800 has revealed that in China’s 10 biggest cities, people snapped up 734 ‘Year of the Dragon’ dinner deals that sold 54,000 times, amounting to a total of 2.97 million RMB (US$470,000) worth of festive food. That represents growth of 940 percent since the last Chinese New Year back in 2011.

The holiday period as a whole saw even larger group buying stats, as people bought about 11,000 deals that sold 1.83 million times to a total value of 65.92 million RMB ($10.4 million). And remember, that’s not the nationwide figure; that covers only 10 large cities. For the grandest of totals, Tuan800 claims the entire deals sector in China saw 11 billion RMB ($1.74 billion) in sales in 2011.

Meituan.com and Lashou.com emerged as the leaders in this ferociously competitive market last year.

[Source: DoNews - article in Chinese]

These stats come from the group buy aggregator and analytics company, Dataotuan. For the December figures it looked at 125 deals sites across 345 cities.

Last month saw the further rise of 55Tuan, rising to be second in terms of market share. Lashou, once the leader in this industry, has suffered quite a knock, dropping down to fourth:

Lashou’s drop might well be due to a lack of popular deals. That’s something that Dianping, Nuomi, and Meituan are doing – as they often seem to do – very well:

Compared to the last time we looked at the deals market in the country, the average price of a deal went up a meagre 3RMB to now be at 140RMB (US$22):

2011 Daily Deals Sector in Summary

Looking at 2011 as a whole, Dataotuan observes that the top 10 deals sites take 71.8 percent market share of the whole industry – while the top 11 to 20-placed websites fight over 16.7 percent share. The remaining crumbs are scrapped over by literally thousands of rivals:

So, despite a number of controversies at individual Chinese deals sites, and industry-wide issues such as customer complaints and some sites way behind in paying merchants, the whole sector has somewhat stabilized and a clear hierarchy has been plotted out. But that doesn’t mean that 2012 will be any less competitive.

For the full stats, plus some insights from deals sites across Asia, hit the source link below.

[Source: Dataotuan]

Here’s a sentence we’ve never uttered before: Good news for Groupon in Asia! Yes, the American group-buying service Groupon (NASDAQ:GRPN) has extended its lead even further in the Taiwanese daily deals sector, and now commands over half of the market share on the island.

The last time we looked at the situation in Taiwan back in July 2011, we saw Groupon had 47.7 percent market share there as the entire group-buying industry grew by 8.3 percent. The very latest data, once again from Goodlife.tw, for December shows that the entire sector shrank by a minuscule 0.9 percent, and that Groupon Taiwan has grown in that time-span to now have an even firmer grasp – a full 52.37 percent in market share.

Gomaji and 17Life remain a consistent second and third place. The latter half of 2011 was good news not just for Groupon, but also for 17Life (gaining 5 percent), and for the mainland contenders Lashou, and Nuomi. That last one is partly owned by the Chinese social networking site Renren (NYSE:RENN). Meanwhile, both Gomaji and Yahoo’s (NASDAQ:YHOO) Taiwan deals portal remained stagnant. JiGoCity – which also operates in mainland China – is not shown in the graph but is another riser, ending the year in sixth place with a 4.1 percent share.

We’ve taken some of the raw data and made a chart to show how things have changed in Taiwan from July to December last year (click to enlarge):

Much of the top eight deals websites in Taiwan remain stable as the whole market shows less volatility than the ferocious scene in daily deals in mainland China.

Groupon entered Taiwan by acquiring the already successful local deals site Atlaspost exactly a year ago. At the time, Gomaji and 17Life were still its main competitors.

Meanwhile, the US site LivingSocial still hasn’t entered Taiwan, despite an aggressive push into Asia last summer. Perhaps it could jump-start its move into the stable Taiwanese group-buy market by buying up either Gomaji or 17Life.

[Source: Goodlife.tw - article in Chinese]

According to the Beijing News, yesterday consumer advocacy groups in twenty-one cities including Beijing, Shanghai, Tianjin, Macau and Hong Kong, released the results of a survey of group buy customers. According to the survey, over 60 percent of group buy customers have had their consumer rights violated in some way.

Reported problems included exaggerated advertising, products and services that differed from what was advertised, failure to fulfill promises and agreements, difficulty returning products, complicated purchasing and service procedures, and listing fake original prices to give the appearance of steep discounts.

The advocacy groups called on group buy sites to establish some standards for quality of service. As far as we’re aware, the report didn’t call out any specific sites by name; thus, no one has responded to it. It’s hard to be sure how seriously to take that 60 percent statistic, but it doesn’t seem out of the question, especially given all the problems even the top-ranking group buy sites have been having recently.

[Image source]

Updated stats for China’s fierce group-buy market seem to suggest that we can now crown a triumvirate of winners – Lashou, Meituan, and 55Tuan. That’s because the trio has finally nailed the holy grail of leading in terms of market share, number of deals sold, below average discounts, and highest revenues. To make that even better, Lashou has a higher than average deal price (where the average deal sold is 137 RMB, which is US$22).

As with the last time we looked at this sector in-depth, the stats are provided by Dataotuan. One major difference is that Tencent’s (HKG:0700) group buying portal, QQTuan, has been ignored as it’s now deemed to be more of a deals aggregator. Taobao’s Jua Hua Suan is similarly left out of these stats.

Here are a five key slides from the presentation which shows figures that go up to the end of October, which are the newest available. (Hit the source link below to see the full show):

Daily Deals Market Share

Lashou once again cements its lead as the top indie startup in this segment, with 12.7 percent of market share evaluated by revenue. Groupon’s (NASDAQ:GRPN) venture in China, Gaopeng, is still clinging on just outside of the top ten.

In fourth and fifth places are some hard-charging smaller rivals – 58Tuan, and 24Quan. The latter has been in the news for all the wrong reasons this month, so it’ll be interesting to see if that progress is sustainable:

Revenue and Deals Sold

This industry has been so painful – with lay-offs, protests, unpaid merchants, etc. – because the revenue from such deals is often so low, leaving the labour-intensive group buy sites struggling to survive on single-digit profit margins. The bad news (as seen in the final slide below) is that average revenue is still dropping, although the average deal price is trending upwards (despite a jolt downwards in October).

FTuan will be familiar to regular readers, but it seems to be sliding down in everything except the average price of its sold deals.

Getting back onto the subject of 24Quan, you’ll notice from the blue bars that its large discounts – way above average – are causing lower than average deal prices. It’s presumably a deliberate strategy to try break into the top three.

Hop on over to DaTaoTuan’s site for the full 30-slide presentation, which includes break-downs of the most popular kinds of services sold, and which parts of China have the best-quality deals.

[Source: DaTaoTuan’s blog]

Our resident financial expert, Mr. G. O' Rilla, actually reckons that O2O investment figures reached just over "a gorillion dollars so far in 2011."

Stats put together by ChinaVenture show that Chinese web companies of the so-called online-to-offline (O2O) variety – such as group-buy sites and e-commerce travel services – have raised a total of 7 billion RMB (US$1.1 billion) in venture capital so far this year. That rebuts widespread fears of a huge squeeze on funding for web firms, at a time of tightened credit and concerns about the financial integrity of some recent Chinese IPOs.

Among the biggest recipients of VC largesse were Qunar – courtesy of $300+ million from Baidu (NASDAQ:BIDU) – and Lashou’s $110 million from Milestone Capital and numerous other sources. Here’s the table of major investments in this sector (which we took the liberty of remaking and prettifying):

A representative of Chinese investment consultants Asimu told ChinaVenture that these O2O-based services – despite operating in fiercely competitive markets – are bolstered by their offering “the basic necessities of life,” such as food and clothing. He also pointed out that, in such a vast market, “even if you have just a one percent market share […] it’s likely that you can go public.”

That’s borne out by upcoming IPOs for Lashou (though currently being delayed) and Vancl (on course for next month).

A total of 64 O2O-based services have snagged some amount of funding this year (only eight of the biggest names are shown in the above table), which is good news. The only issue we have is that “online-to-offline” is quite a silly phrase, which relates to pretty much everything we buy on the internet. Perhaps suffice to say that e-commerce sites are being viewed – and invested in – as tomorrow’s enterprise titans. And that’s not least because as much as half of China’s poorer urbanites are already using local online shopping sites.

[Source: ChinaVenture - article in Chinese]

Group buying website Deals and You has raised $17 million from a group of investors, led by Mayfield Fund and Norwest Venture Partners – with participation from Nokia Growth Partners and Intel Capital - according to report from the Business Standard.

The report further states that the 14-month old company has apparently divested around 18 percent to 20 percent to investors and is currently being valued at US$85 million.

Deals And You will be using this latest infusion of capital to invest in technology, infrastructure, hiring talent, and branding. The company is also apparently revamping its website, aiming to deliver an improved user interface to its customers.

Elaborating on the new funding round, Gaurav Kachru, CEO, Deals And You, said:

We are very happy and encouraged by the faith our investors have shown in us. The raised capital will help us continue to build a strong customer focused business with greater investments in technology and infrastructure, which will help better serve our customers.

Known as Wanamo.com in its previous incarnation, this daily deals website was acquired in June 2010 by Group Buying Global A.G. and Harish Behl of Smile Interactive Technologies Group. Two months down the lane, the website was rebranded and launched as Deals And You, raising $1.5 million in funding from Group Buying Global A.G.

The company currently serves daily local deals in 20 cities and national deals ranging across product, travel, and retail in 250 cities in India.

It seems like just yesterday that Lashou was all ready to go IPO on the NASDAQ as LASO. But now, in the middle of its road show, a rumor is spreading that its IPO is cancelled.

Tu Hongchuan, a Chinese venture capital CEO, seems to have started the rumors by posting this message to his Sina Weibo account this morning:

Is Lashou canceling its IPO? Wall Street investors are saying “Lashou is not going to IPO.” I hope this is not true, Lashou’s angel investor is a buddy of mine. Go!

It would be a truly bizarre time to cancel, given that their scheduled IPO is right around the corner, but adding fuel to the fire is that as yet, the media hasn’t been able to get a response from Lashou’s CEO Wu Bo, and Zhu Xiaohu of GSR Ventures, a major Lashou investor, said it was inconvenient to comment at this time.

We spoke with a source familiar with Lashou’s corporate leadership, who could not confirm the rumors, but told us:

I was talking to some investment bankers just the week before and it seemed like things were on pace, so something must’ve happened. [It] may be regulatory-related.

The source, who told us they had enjoyed working with Lashou and praised its CEO Wu Bo, also added:

The company claims that Lashou’s China operations was breaking even towards the later half of the year, led by strong performance in Guangdong area. But this does not take into account the massive amount they poured into marketing. It’s not necessarily Lashou as a company, but the whole group-buy industry in China.

Lashou’s road to IPO has not been entirely without bumps. Last month there were rumors about possible upcoming layoffs for the company. Also, Lashou executives have pledged to buy their own shares at the IPO, which is definitely unusual.

What’s going on behind closed doors? We have no idea. It should be clear fairly soon whether or not Lashou plans to IPO, but if it doesn’t, there’s got to be a pretty significant reason that would cause it to cancel this late in the game.

The Chinese group buying and venue review site, Dianping.com, has been awarded the title of “Chinese web company with the most investment potential.” That’s according to 70 leading venture investors in China who whittled down a list of 50 contenders to ultimately declare Dianping the winner. The event was hosted by Zero2IPO, which hooks up entrepreneurs with VC sources, and took place this past weekend in Shanghai.

The investors were particularly impressed, they said, by Dianping’s mobile apps – see here – for iPhone, Android, BlackBerry, and Symbian. That’s not only because the apps look pretty good, but because their strength shows how the company understands the new mobile wave, and how it’s critical in driving growth. Indeed, right now monthly page views via mobiles represent about 50 percent of the site’s total, and are expected to surpass the regular site soon in terms of growth.

This August, Dianping had 10 million unique mobile users. The company claims more than 42 million monthly active users, approximately 20 million reviews, and over 1.2 million member merchants.

Dianping was founded back in 2003, solely as a site for local listings and reviews. But recently it utilised its local network and merchant ties to also provide daily deals in China’s over-crowded group buy sector. Earlier this year, the site secured joint investment of more than US$100 million from Trust Bridge Partners, Sequoia Capital, Qiming Venture Partners, and Lightspeed Venture Partners.

Back in April of this year, we caught up with Dianping’s Michael Jiang and talked to him on video about the site and its growth.

The portal, which is currently in beta, will offer deals in 11 cities including Ahmedabad, Bangalore, Chandigarh, Chennai, Delhi/NCR, Hyderabad, Jaipur, Kolkata, Mumbai, Nagpur, and Pune. The company has also claimed that it has partnered with premium merchants in these cities to offer the best local e-commerce experience.

In addition to the rebranding, the daily deal giant has also announced a new leadership team, following the resignations of SoSasta founders Ananya Babna and Udayan Babna.

The new team will be headed by Ankur Warikoo, who has been appointed as the CEO of Crazeal.com and will be responsible for growing Groupon’s business in India.

Explaining that Crazeal will share the same DNA as its parent company, Groupon Inc, he said:

Having pioneered the online deal industry and emerged as the top player in markets around the world, we are confident that this is the right time for us to provide the discerning Indian consumer with the Crazeal.com experience.

He further added:

We are identifying merchants with high quality offerings, expanding to newer cities and above all enabling Social Commerce to help consumers avail of the best that their city has to offer. We are passionate about bringing quality deals to our consumers, and we feature only those deals that we would ourselves love to buy.

Other prominent members in the team include Bharath Devanathan as the COO and Sachin Kapur as the Head of Marketing.

The company will also sport six sales directors in Delhi, Mumbai, Bangalore, and Kolkata. These directors will take care of building the Local Service, National Products, and National Travel verticals.

Among the merchants who are already on-board the revamped Crazeal include – Cafe Coffee Day, Domino’s, and Claridges for national deals and Kainoosh, Olivea, Crowne Plaza, and Amoda Spa for local deals.

Will It Fare Better This Time?

Groupon India’s earlier avatar, SoSasta.com had undergone a lot of internal problems and failed to make any significant impact in Indian market, since its entry last year.

It was unfortunately hacked and the entire user database including e-mail addresses and clear-text passwords was leaked online.

Adding to the injury, SoSasta founders Ananya Babna and Udayan Babna resigned from the company, followed by a series of top level management people walking out of the company.

And as if that was not enough, the company also faced a trademark challenge by a Bangalore-based company, ValueNet Ecommerce which owns Groupon.in and has apparently trademarked the brand name Groupon, in India.

While Groupon India initiated a case against the latter in Delhi High Court, the latter has also filed a case against Groupon in Karnataka High Court.

Now that Groupon has rebranded its entire Indian business, it would be interesting to see if it will see any success in this new avatar.

Indian group buying website MyDala.com, has raised second round funding of Rs 18 crores ($3.6 million) from Info Edge (India).

This follows its initial funding of 9 crores ($1.8 million) from Info Edge and Rs 1.1 crores ($250,000) from the founders of CX Partners.

Launched in November 2009, the start-up claims to be the first group-buying site in India and had recently hit the 3 million subscribers milestone.

It had also released a BlackBerry app in August, which enabled users to easily browse through the deals in their area and pay for them using the integrated payment options in the app.

With e-commerce booming in India and group buying sites popping up like mushrooms across the country, we assume this funding will be used to scale up MyDala’s operations and compete with its rivals like Snapdeal, Crazeal (previously Sosasta), and dealsandyou.

[via Medianama]

The group buy website that most audaciously cloned Groupon in China looks like it might be one of the first big-name casualties in the ferocious daily deals market. Formerly known as, provocatively, Groupon.cn – but now called TuanBao, with only the URL saying “Groupon” – it enacted a new round of job cuts this week that saw dozens of people being let go from individual sales offices scattered across the country.

It now appears that the cloned Groupon.cn… hmmm, I mean TuanBao, has fired 70 to 75 percent of all its staff from the time of its inception to now. Earlier this year, Chinese media reports today, the company had 4,000 employees nationwide. But that figure is now at 700. That’s 82.5 percent of all employees at TuanBao having being told to clear their desks.

Taking some regional offices as examples, TuanBao’s Beijing branch has trimmed its editorial department from 120 to 36 people. Further south, in Suzhou, the original team of 40 there is now down to 10.

TuanBao/Groupon.cn's rather confusing dual identity.

TuanBao’s woes are indicative of the group buy sector’s extraordinarily tight margins, and the fact that throwing lots of poorly-paid and desperate sales staff at the situation doesn’t necessarily turn all your offered deals into sold deals. Industry insiders believe that there are as many as 5,000 group buy sites in China – and none of them are actually making any money.

The official and genuine Groupon operations in China, Gaopeng, has had a rough summer as well, with as many as 400 staff being fired as part of an apparent tightening or restructuring. Though the official response was that the company was just firing underperforming workers.

In April of this year, a false rumor spread through the deals industry here that the real Groupon had acquired the Groupon clone in China. But this news surely puts that notion to rest forever. Now the real Groupon needs to be much, much more worried about its more successful adversaries here, such as Meituan or Lashou. Indeed, the latter might even beat Groupon.com to a US IPO, which would be pretty interesting.

[Source: DoNews - article in Chinese]

After having a dream run in India, Snapdeal is apparently looking for expansion in South Asian countries like Singapore, Malaysia and Philippines.

Talking to PTI, Snapdeal’s CEO, Kunal Behl explained:

We want to replicate our success in India in other South Asian countries like Singapore, Malaysia and the Philippines, markets which are similar to India, where people seek a good deal. We are looking for a partner for these markets.

The group buying portal, which currently serves 50 Indian cities and has an unique distinction of having an Indian village after its name, also anticipates to go international by the end of this fiscal year and surpass Rs 150 crore ($32.65 million) in revenue.

Excited by the amazing growth experienced by the company’s product deals business, Kunal Behl said that it has contributed to about 20 percent of Snapdeal’s total business and they are now considering to bring in apparel and lifestyle products as well. He said:

Earlier our target was Rs 100 crore ($21.76 million), but the way business is growing, we should be able to cross Rs 150 crore ($32.65 million). Our products business is doing phenomenally well and we are looking at bringing in apparel and lifestyle products as well.

The company recently raised $40 million in a series B funding round from Bessemer Venture Partners, Nexus Venture Partners and Indo-US Venture Partners. which is dubbed to be largest single round of private investment in an Internet company in India to date.

Kunal Behl had stated that the funding will allow them to expand the product deals business, strengthen its local and national merchant deals vertical and introduce innovations to enhance consumer and merchant convenience such as group car buying.

[via Economic Times]

Group buying in China: lots of competition

Today, the Economic Observer is reporting some more grim news for group buy sites in China: the competition is fierce and the rewards for victory are scant. This is something you probably already knew, but you might still be surprised by the numbers: China has over 5,000 group buy websites, 3,000 of which were launched in the first half of this year. And every single one of the nation’s top ten group buy sites is losing money, according to the CEO of 55tuan, which is one of the top ten sites by most reckonings.

Of course, it’s unlikely that group buy will remain unprofitable forever if Chinese consumers are interested in it. But according to some, consumer interest in group buy sites is already dwindling. The Economic Observer quotes a disappointed Xu Lei, the CMO of Yougou (a group buy site), as saying that “group buying has already undergone a fundamental shift, consumer interest is weakening, and the sales attained by group buy sites have yet to reach half of what was predicted.”

Part of the problem is that running a nationwide service is ridiculously expensive because there are relatively few chain stores in China, necessitating a large number of on-the-ground employees in any location a Chinese group buy service wants to cover. But hiring a large number of employees cuts deep into one’s budget — Groupon seems to have learned this the hard way as they’re firing staff and shuttering branches nationwide. They’re probably the highest profile group buy site that’s doing that right now, but they’re not the only ones. The Economic Observer article cites several e-commerce companies that are planning to or already have pulled out of the group buy game entirely. As the CEO of one Taiwanese e-commerce company put it, group buy “is just not ideal.”

So what’s the future of group buying sites in China? We’re not sure, but we’re willing to bet that at the very least, one year from today there will be a whole lot fewer of them.

So who’s winning? Well, that can change at a moment’s notice. In March it looked like Taobao’s Juhuasuan service had a hefty lead on everyone else. But recent stats tell a different story. Stasticial analysis firm Hitwise China analyzed the overall traffic to Chinese group-buy sites for last week (7/31-8/6) and determined that as far as traffic is concerned, Lashou has surpassed Taobao, and Nuomi and QQtuan have dropped in the rankings. A lot of things have changed since March, it seems.

Don’t believe us? Behold, a chart!

The sudden surge in Lashou’s traffic is probably a reflection of the mega $110 million funding Lashou received back in April of this year. Given that, it’s no surprise Lashou has made it to the top of the traffic rankings. Our sense is that at the moment, Alibaba Group is placing its focus on Taobao and less on Juhuasuan. It will be interesting to see how Juhuasuan will fight back, though.

It’s also worth noting that Gaopeng, a joint group-buy effort by Groupon and Tencent isn’t even on the list. At late July last month, Groupon UK told us that an unspecified amount of staff had been cut, but clarified: “We’re not laying anyone off in China, but terminating some employees for underperformance.” From what it seems, the Groupon-Tencent partnership is going to be another case study of Western company failing to expand to China. Not much damage done to Tencent, though, as it still has Tuan.qq.com under its charge.

[Via Sina Tech]

As explained by DealKeren’s Managing Director, Adrian Suhermanat, at the IDBYTE workshop yesterday, the company’s market size reached 65 percent in May 2011 (see chart below, DealKeren internal data).

Considering the current growth in the social media space, the market potential for group buying websites is still huge. The market size is roughly only around USD 400,000 per month, so there’s still much room to grow. It’s no wonder that so many new players from home and abroad are looking to compete in the area.

Over the last three months, three international buying group players have entered the market: Groupon (which acquired Disdus in April), Maiplay (the Indonesian version of PlayHawaii), and LivingSocial (acquired DealKeren in June). Local players are also growing rapidly from less than ten players in 2010 to more than 30 players as of June 2011. This will make the competition tougher for DealKeren and for other players too.

Two of China’s many group buying start-ups have ended a long-running legal battle, with Aibang.com ordered to pay the larger Dianping.com compensation for systematically stealing venue listings and user reviews.

The Beijing Court of Appeals today upheld an earlier verdict, and thus drew a final line across this dispute. The judge ordered Aibang to compensate Dianping to the tune of RMB 500,000 (about US$77,000), citing plagiarism and unfair competition.

With there being literally thousands of group buying sites in China – with a few dozen prospering reasonably well, and a handful of those having gained funding – the quality of listed venues and the quantity of user reviews can be crucial in making a site look more successful in the eyes of users. Aibang, in light of the judge’s verdict, as well as a growing clampdown on intellectual property violations, is lucky not to be having to pay out a 1 million+ RMB figure.

Both Aibang and Dianping have similar roots: starting out as city listings and review websites many years ago, before venturing into the explosive new group buying arena last year.

We’ve looked at China’s top 10 group buy sites before, and found that Lashou.com is the biggest indie site, but it trails home in second place in terms of number of visitors to giant Tencent’s own deal-of-the-day portal.

Penn Olson sat down and chatted with Dianping’s VP of Product and Operations, Michael Jiang, at this year’s Global Mobile Internet Conference – watch the video for his reflections on being “China’s Yelp” with 30 million users and a recent valuation at US$1 billion.

[Source: Techweb]

Other investors in this round includes Yuuwa Capital, Pollenizer, and several angel investors.

Dealised will use its regional Asian headquarters in Singapore to drive global business expansion and develop mobile group-buying solutions.

Dealised is the first to offer a group-buying solution in Asia and already has a presence in UK, Scandinavia, Middle East, and US. The Daily Telegraph and Mecom are some of its notable clients. Dealised was created in late 2009 to provide group-buying platform solutions to Spreets in Australia which was acquired by Yahoo7! for A$40 million (US$42.9) in 2010.

The group-buying platform solution company has also appointed Jonathan Marchbank as CEO to spearhead Dealised in Asia. Marchbank has over 20 years of experience in the mobile operator and device manufacturing sectors and has served as COO for Virgin Mobile US prior to joining Dealised. Marchbank commented:

Dealised partners in Australia and Scandinavia have already beaten Groupon and Livingsocial in their local markets. With our platform & services, partners quickly create and manage regular offers for their customers, maintaining revenue and relationships at risk from Groupon-like clones. We are busy repeating that successful formula in other markets.

The most exciting trend is in mobile, especially in Asia, and we see the volume of group-buying transactions on smartphones and other mobile devices growing exponentially over the next couple of years. Our operations in Singapore, as the business hub for Asia, are where we will focus on mobile growth.

He explained more about DealKeren as a social commerce platform, which he believes is a differentiating factor from the other e-commerce players. As outlined in the company’s statement, social commerce is e-commerce that involves the use of social media to support the online buying and selling process.

Suherman then shared some statistics about DealKeren. The Indonesian group-buying site started in August 2010 in Jakarta with only 10 employees. Today DealKeren claims to be the market leader among group-buying sites in the nation with 65% market share. With 90 employees, DealKeren has so far expanded to 4 major cities, attracting over 300,000 members and 300 merchants. 55% of their members are female, between the ages of 25 to 35 years old.

Why DealKeren accepted Livingsocial’s offer

Suherman explained that Livingsocial is the second largest group-buying site in the U.S. Since its was founded in July 2009, it has expanded to over 250 cities in 14 countries, across four continents with 1,500 employees worldwide.

With those stats, DealKeren accepted Livingsocial offer in an effort to accelerate growth. Both LivingSocial and DealKeren share the same drive, values, and goals. With access to more capital, DealKeren can now take more daring steps and expand even faster than before. Being part of Livingsocial also means that DealKeren can leverage on its regional and global market presence.

Adrian Suherman also explained that DealKeren will follow Livingsocial’s model, namely on the following deals categorization/features:

• Escapes: providing unforgettable experiences
• Adventures: providing unique produced experiences
• Families: providing family experiences
• Instant: real-time deals around your neighborhood [based on location]

With a proven business model and technical support from Livingsocial, DealKeren will be a very competitive with rival Disdus. With a end-of-year target of one million members, DealKeren also hopes to expand to cover more customer needs in addition to just providing deals for food, fun, travel, and beauty.

With immense competition and hundreds of Groupon clones lurking around the world, every clone needs to somehow find a way to differentiate itself from the crowd. Snapdeal.com, an up-and-coming India-based groupon clone, funded by Nexus Venture Partners and Indo US Venture Partners, has found a unique way to stand out from the crowd, and do some good in the process. The company has adopted a village called Shiv Nagar in Uttar Pradesh, India and renamed it to Snapdeal.com Nagar.

The one-year-old online group-buying start-up will develop the village’s infrastructure, including installation of water pumps and support of the local school and hospital. Shiv Nagar’s residents, many of whom have not even heard of e-commerce or the Internet, have decided to take on the company’s name as an expression of gratitude.

Snapdeal is one of the pioneers in the Indian group-buying deals realm with $12 million in funding and over five million subscribers.

Kunal Bahl, CEO of Snapdeal.com, believes that this is the company’s way of giving back to the society:

We are glad to contribute and support the villagers in various infrastructure needs such as creating provisions for drinking water, and also help them with necessary inputs for their upcoming school and hospital in a long term association with the community.

Maiplay originates from Hawaii as PlayHawaii. Much like other group-buying sites, it offers deals from restaurants, spas, entertainment merchants, many more. We got in touch with Jon Sugihara, CEO & Co-Founder of Maiplay and PlayHawaii to learn more about the service and his plans in Indonesia.

1. Maiplay just launched in Indonesia, but Groupon is already here. What are your thoughts on this?

One of the challenges to group buying is that there is no customer loyalty. They will buy with whoever has the best deal that day. We have been able to compete with and beat Groupon consistently in Hawaii by providing better deals and we are confident that we can do this again in Jakarta. We have already featured a number of the best restaurants in Jakarta.

2. I know you must be tired of answering this question, but what’s the difference between you and other Groupon ‘clones?’

Our focus is on quality and great deals, both for the merchant and for the customer. Our other differentiator is the value we add to the merchant. We have a number of services and products that the customer does not see that help the merchant to get a clear picture of how their promotion did. Our competitors disappear as soon as the deal is signed, so most businesses are in the dark as to what they got from a promotion. We focus on engaging with the customer and getting them to return to the business after the initial promotion.

maiplay.com

3. If you plan to expand across Indonesia, how do you scale and put your presence across all cities?

The biggest challenge to scaling is finding sales people and managing those teams across larger geographies. We have a number of methodologies and tools that allow us to track the performance and support our teams from anywhere in the world. We have been doing this for almost 2 years, so we have had a lot of time to learn from our mistakes and grow.

4. I heard that one of your backers is Eduardo Saverin. How does he help your start-up?

Eduardo Saverin is helping us as an advisor. Eduardo is very strategic for us as the core principal of group buying is the social aspect of sharing deals with friends. Over 30% of the traffic to each of our deals come from social networks, so it is imperative that we have solid integrations with these networks. Eduardo is helping us to build strategies on how we can maximize Facebook and other social media.

5. Finally, what is your target and plan for Indonesia this year?

We believe the potential market for Jakarta alone could be over USD$12m/year as long as we can convince consumers to spend money online. There is a target population of over 2m users that fit into the initial demographic of users that we are targeting. These are young professionals with disposable income. They love to go out and try new things and are computer savvy.

Catch more of our interviews with founders and thought leaders here.

Breaking news this afternoon from our friend Gang Lu over on Technode. He is reporting that group buying giant Groupon.com acquired Groupon.cn in a deal “signed today.”

The latter is one of many Groupon clones in China that made up crowd of competitors for the original Groupon, which recently entered China as Gaopeng.com. According to numbers from iResearch earlier this month, Groupon.cn was bringing in about 18.77 million monthly visitors.

This raises the question of how Groupon will manage it’s new Chinese domain surplus. Will they jettison Gaopeng.com? We’ll have to wait and see how this domain dilemma plays out.

Groupon gettin’ busy in Asia

Groupon has been working hard to make progress in the Asia region this year. In mid-March the company launched Groupon Korea at the groupon.kr domain. And then this month the company also acquired Disdus in Indonesia. Groupon faces a similar “attack of the clones” there.

Back in January, Groupon picked up Malaysia’s Groupmore as well as India’s SoSasta. And before that in December, Groupon acquired Singapore’s Beeconomic, Taiwan’s Atlaspost, and Hong Kong’s uBuyiBuy.