Happy Spring Festival, and By the Way, We’re Bankrupt

Is this what the future holds for group buy in China? (via Sony Pictures)

2011 has been a rough year for China’s group buy sites. That’s evident just from the fact that there are an awful lot less of them than there were back in January. Over the year more than 2,000 group buy sites closed. But is 2012 the year of the comeback? Or is it the apocalypse?

For the beginning of the year at least, it’s looking more like the latter, at least as far as group buy sites are concerned (no word yet on whether the world will end in 2012, but Bruce Willis is still alive, so we’re probably safe). Chinese analysts are suggesting that the first three months of 2012, at least, are going to see even more group buy sites closing their doors, with Spring Festival being an especially rough patch. Given the current scale of the market, some insiders are suggesting that 90 percent or even more of currently extant group buy sites will close sooner or later. Many may be sooner.

Why close on Spring Festival? One reason is that the holiday, which marks the new year in the lunar calendar, is a traditional time for Chinese people to make changes. It’s likely that right now there are group buy sites limping along purely for the sake of making it to Spring Festival just to ensure their workers have money to bring home and celebrate with.

Of course, losing your job isn’t exactly the best way to kick off China’s biggest holiday. But if industry analysts are right, lots of those jobs are doomed anyway. Perhaps it’s best to end the year with a clean break, and then start the new year with something fresh. If we’re lucky, maybe some of the folks from failed group buy sites will try out new startups and work on something a little more interesting!

[via TechWeb]