Rumor: Lashou Mall to Launch Next Week, Disrupt E-Commerce in China

Lashou, one of China’s leading group-buy sites, is rumored to be expanding into the more conventional e-commerce segment next week with the launch of ‘Lashou Mall.’ Chinese tech media reports that the Lashou Mall – due for launch on December 8th – would be aimed at helping consumers buy services online from local small businesses in a more straightforward way than the current ‘deals’ method. The fees charged to local firms could be as low as 1,980 RMB (US$312) for six months.

The group-buy/daily deals segment in China has been frantic and fierce this year, marred by lawsuits, protests, firings, and unpaid merchants. Plus, margins are tight – possibly below 10 percent for the sites themselves – and many are losing money.

A shift towards the B2C – or B2B2C – sector, would seem a good way for Lashou to scale, diversify, and secure fatter margins all at the same time. As per today’s rumors, it sounds like an open platform of the sort that Alibaba’s Taobao Mall pioneered in 2008, and which has gone on to be the country’s leading e-commerce site.

Lashou Mall vs Taobao Mall?

Purported lower overheads for vendors on Lashou Mall would be quite timely and pertinent, as the past month has seen both virtual protests and actual, physical demonstrations by smaller businesses running on Taobao Mall due to rule changes that brought in much higher cash deposits. If it turns out to be true, Lashou Mall’s much lower rents could be disruptive in the industry, especially amongst much smaller family-run companies.

Lashou is supposedly listing in the US this month, but it’s believed to have been delayed by regulatory issues. A major announcement from Lashou next week would be in contravention of the pre-listing quiet period – and so would indicate that the IPO was either significantly delayed or cancelled altogether.

[Source: QQ Tech news – article in Chinese]