Come with me, local group buy sites!
If you didn’t get that the title is sarcastic, you probably haven’t been following the group buy scene in China very closely. Even the biggest players in the market are having issues like layoffs, layoffs and massive layoffs, so it’s actually nota surprise that the little guys are hurting, too.
The latest indicator of this is a report in the IT Times. The report, mostly based on data from 800 domestic group buy sites, showed that 70 percent of the income from group buy sites comes from 18 major cities, with smaller second and third-tier cities drawing in only about 30 percent of the earnings.
That percentage could increase if bigger sites continue their retreat, as they’ll be forced to cede their shares of those smaller markets to local players. But many local group buy operations may lack the staying power to last that long. The investigation showed that 12 percent of group buy sites hadn’t been updated in over a month, and an additional four percent are closed at least temporarily and possibly permanently.
These sites — which are being called “zombie group buy sites” in the media — may be trying to weather the storm by suspending operations until things get better. But there’s no indication things are about to get better, and it’s unclear how many sites will be able to return from the zombie afterlife even if the market does take an upswing.
According to the report, more than 300 local group buy sites have closed in China this year.
The report also noted that on a larger linked list of several thousand Chinese group buy sites, many of the links were already broken, indicating that those sites have already disappeared.
[IT Times via Sina Tech]
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