CEO of Focus Media: Group Buy Sites in China Bring an Ad Spending Boom

The CEO of Focus Media, China’s biggest outdoor digital media agency, has revealed that the country’s multitude of booming group buy sites now account for US$10 million (64.3 million RMB) of quarterly revenue at his company alone.

Focus Media’s CEO, Jason Jiang (pictured below), today claimed first quarter revenues for his firm of $136.1 million. The spending from group buy sites now represents eight percent of Focus’ revenues. Jason says that’s up from zero percent last year; and will likely grow to 10 percent when he eventually reveals Q2 earnings.

Focus Media CEO, Jason Jiang.

Ad spending among the dozens of leading group buy sites in China – only one or two of whom have a market share that’s in double digits – is turning into a surely unsustainable arms race. It is reported that some of the key players in this sector – such as Meituan, Lashou, and Nuomi – spend anywhere from 10 to 20 million RMB per month on ads.

This trend of increasing e-commerce spending goes beyond group buy sites and is occurring among smaller B2C sites as well, says Jason. Redbaby, a specialist site for children’s clothing and general goods, is reported to be one of the biggest ad spenders in that sector.

The ads often take the forms of repeated segments on LCD screens in subway trains and in supermarkets and office lobbies, or static ads plastered on billboards and all over buses (as pictured above).

Just last week we looked at market share among group shopping sites in mainland China, and found that Tencent’s QQ Tuan and Meituan were emerging as the two strongest competitors thus far.

[News source: Techweb – article in Chinese; Lead image source: China-screen-news.com]