5000 Group Buying Networks Are In Chaos: 95% Will Finally Fall.

Group buying network latest data show that as of July 31, 2011, the whole country

Groupon, the founder of group buying industry, has been opened in seventh months.

In one year alone, the number of domestic group buying websites increased from five or six to 5000, but "

Whether we can make profits next year may be the life line for deciding whether the group buying website can survive or not.

On the 5 minute phone call, Liu Yang repeated the sentence 4 times. After hanging up, he said he had an impulse to beat people.

Liu Yang, a 29 year old head of the marketing department of a nationwide group buying website, received a media phone call from the financial weekly newspaper reporter to verify the unfavourable rumors about his website on the Internet.

Liu Yang believes that these rumors are made and distributed by competitors.

"Using network water army and the media to disseminate false news, not to mention, but also out of a high salary from our employees in the bulk of the corner, the price war is now no bottom line, the money should also be taken away from customers, the long term results may only be two wars."

There are similar troubles, not only Liu Yang, but also the disorder of the crazy competition has become the general ecology of the group buying website. No matter who is, it is difficult to be independent.

Groupon, the founder of group buying industry, made profits in the seventh months of opening.

This amazing speed of development is bound to be the "group buying" business model will be a large number of copies in China.

At the beginning of 2010, Feng Xiaohai sold the $10 million of the car that he founded, and began to look for the next business opportunity. A website named Groupon inspired him.

During the Spring Festival, Feng Xiaohai began to talk about something called group buying, and his new project was called "full seat".

Almost at the same time, Wang Xing (micro-blog) also stared at Groupon, and he built a website, now known as the "US regiment".

Wang Xing's Tsinghua alumni Wu Bo started the handshake net after selling the focus network to Zhang Zhaoyang. The first single business was selling Starbucks's shopping vouchers.

In 2010, the first year of the Chinese group purchase, several young people brought a team of more than ten people with a small sum of money from the previous venture, and wrote a strong sum in the history of e-commerce in China.

Wang Xing, Wu Bo and Feng Xiaohai, who had studied carefully the group buying industry's Groupon, had been online for more than a year, and realized profits in the seventh months after the opening.

This amazing speed of development is bound to be the "group buying" business model will be a large number of copies in China.

No one had thought that just a year later, the number of replicated websites reached an astonishing 5000, and a fierce battle was inevitable.

After a year's operation, the big pattern of group buying industry has been set up. With the help of Alibaba's high quality platform, Taobao Juhuasuan has been firmly controlling the market. However, because the business mode is different from other websites, it is basically out of place, and the websites of local services such as handle, league, 24 coupons and glutinous rice have firmly occupied the top ten seats in the industry, but this is not the final outcome. They are the first tier and the most competitive battleground.

Xu Maodong, who is holding heavy gold, has launched a large-scale "demolition action". The core of a large number of competitors has been selected by high salary plus options.

Tsinghua alumni Wang Xing and Wu Bo and their American team and handshake have been the most direct competitors since last year. But recently, a strong new arrivals joined in the mess, which is causing them the greatest trouble.

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Before focusing on SP and angel investment big brother Xu Maodong, suddenly targeted at a website called Wo Wo Group, and became chairman in a very short time. Then he directed Wo Wo Group to start a series of "suicide attacks" on the old pattern of group buying industry.

Different from the rolling development of other group buying websites, Wo Wo Group has expanded rapidly in 150 cities across the country in a short time by means of "merger and acquisition plus direct battalion". Xu Maodong admitted that he had contacted more than 300 regional group buying websites, and chose more than 20 of them to implement mergers and acquisitions.

Large scale acquisitions have made Wo Wo Group expand rapidly, and the number of employees has increased geometrically, which is obviously far from Xu Maodong's plan.

Xu Maodong, who was holding heavy gold, launched a large-scale "demolition action". The core of a large number of competitors was selected by high salary plus options.

In the industry, there are only 200 people in the East China region. The team has been away from Wo Wo Group. In recent days, Xu Maodong has announced a group of new talents through micro-blog.

And a rumor of "premeditated job hopping Wo Wo Group personnel list" is the crowd buying industry panic, insiders said, the blacklist is Wo Wo Group processed smoke bombs, through third parties deliberately revealed to the opponent, the purpose is to let the list of staff loyalty is suspicious.

Wo Wo Group's various "conspiracy theories" are rampant. Although Xu Maodong has repeatedly said that Wo Wo has never hired the Internet public relations to disseminate false information, the heads of several large group buying websites have told financial weekly reporters that their websites have encountered rumors and attacks from their peers.

"Group buying this industry, the trust of customers is very important, and slander our competitors is not only a very big impact on ourselves, so many customers no longer believe group buying this way of consumption, for the entire industry is also a heavy blow."

CEO Feng Xiaohai told financial weekly newspaper: "improper competition means widespread, but individual websites will be more obvious, now the whole industry is still relatively impetuous."

In addition to violence and malicious public relations, group buying websites are still competing for price. The executives told financial weekly newspaper: "many competitors will lower their prices on the basis of discount offered by merchants. The same list is cheaper than us, and we must also grab customers when losing money."

The lack of control is only the end of the website that is driven by the wave. Eventually, whoever can take the lead in achieving profits before the end of next year is very important. Whether public relations, talent war, price war or advertising war require huge financial support, in other words, the competition among group buying websites is the burning money competition.

The number of employees of several large group buying websites has expanded from around 10 last year to more than 1000 people. The number of employees in Wo Wo Group has exceeded 5000, and the cost of human resources has increased sharply.

The large group buying websites that are busy driving horses are competing to set up sub stations in various places, and they need large amounts of cash support.

At the same time, the overwhelming advertising campaign is also breathtaking. The group buying giant represented by the handover network, the Gao Peng network and the group Bao network has rushed to advertise the ads to the subway, office buildings, outdoor media, portals and even CCTV.

Data show that in 2011, the advertising budget of the US group network was 130 million yuan, the glutinous rice net was 200 million yuan, and the group Bao network was as high as 550 million yuan.

The website of Renmin group buying website is the first to realize the packaging and listing. It is an epoch-making industry in the industry. It successfully landed in the capital market, although it brought a lot of cash to glutinous rice, but it had to publish financial data to make glutinous rice and even the whole group buying industry encounter strong doubts.

According to the latest quarterly report, glutinous rice net earned $900 thousand in the first quarter of this year, operating cost was $4 million 600 thousand, and the ratio of input and output was five to 1, huge loss.

Financial weekly newspaper reporter learned that the average gross profit margin of group buying industry is only 8% to 10%, and no website is profitable, and the operating costs of "big Splendor" mostly come from different forms of financing.

Group buying is in a frenzy of capital craziness, which can be described as a great spectacle in the field of electricity business this year. It was almost a reversion of the gold rush from 2004 to 2005. In the short term, more than 300 video websites sprang up like mushrooms, and capital poured in. But in the past 6 years, there are few video websites with clear profit models.

According to Analysys International Statistics, in 2010, China group buying website received 13 financing, involving 9 group buying websites, and the amount of financing was nearly 700 million yuan.

In the first half of this year, various group buying websites announced the news of B round of financing, of which Wo Wo Group announced in a high profile that it expected to raise the amount of $200 million, and claimed to have launched the IPO program in the US.

However, Wo Wo Group said the $200 million, many people in the industry said the water is very great.

Anonymous insiders told financial weekly reporters that "Wo Wo Group's announcement of the cast includes CDH, Tian you, Qing Ke, Bauhinia and Jiaxi, which only has the ability to make big money. But after Wang Gongquan's elopement, the project has no one to follow up. The strength of other wind power is hard to put 200 million dollars into the nest, and the actual financing should be around 30 million dollars."

Recently, Wo Wo Group has been rejected by many underwriters of Goldman Sachs, Merrill Lynch and Deutsche Bank, and the hopeless news of short term listing has spread like wildfire. Despite repeated denials, the suspect's voice has not subsided.

Wang Xing, CEO of the US group, said in an interview that at present, the amount of financing claimed by various group buying websites has mixed much water. The so-called "estimated amount of financing" is often far from the actual situation.

What is even more worrying is that generous investors have begun to be cautious and the scale of financing has shrunk dramatically.

"Six months later will usher in the winter of group buying website capital, the industry's survival of the fittest will be more severe, and the company that has the ability to get financing again will not exceed 5."

Wang Xing said.

Financial weekly newspaper reporter learned from investors that the news that thunder and Shanda literature are cold is the direct cause of tight financing. In addition, over the past few years, the way of burning big money has not changed for real profit. It is very likely to lose confidence in the capital market.

This assumption has gradually become the consensus of the industry. Wang Xiaodong, founder and CEO of the conglomerate network, said that after a year of frenzy of burning money, the funds available for group buying network have been stretched to the limit, and the cost pressure has reached the edge of collapse. If we do not effectively control the cost, we can only go out if we run out of money.

"The industry must face integration."

Feng Xiaohai, CEO, said: "although the group buying market is very large, I do not think that there are more than 5000 websites that can survive. Lack of control is just a website that will be driven by waves. Eventually, it will be eliminated. Whoever can take the lead in achieving profits before the end of next year is very important. We can not expect all the financing to live. Cost control and profitability are the basis for survival."

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Many small websites with only a few people serve only a small geographical area. They know what trades they can do, how large they can do, and how well they manage.

Tension has set up a small group buying website, because the difficulty of capital turnover has stopped operation at the beginning of this year. He told reporters that low cost, high capital turnover speed and clear profit pattern were the main reasons for the massive rise of group buying websites.

"The cost of buying domain name space and website source code is only a few hundred yuan, plus hardware and human resources costs, and want to build a group buying platform, 5-6 people, tens of thousands of yuan start capital is enough.

At present, there are mainly three kinds of cooperation modes in group buying websites: one is activity rebate, two is advertising promotion service, three is sales of membership cards, three modes are all clearer, and operation has been proven to be relatively mature.

Against this background, group buying websites are growing like weeds in a year.

According to the latest data from group buying network, by the end of July 31, 2011, the number of nationwide group purchase network reached 5472 historical highs, and the average daily number of new group buying websites was 7.13. It is expected that the number of group purchase websites will exceed 5500 in the first week of August.

Although mixed, but group buying industry echelon has basically taken shape, the most powerful 10 websites stable operation occupied nearly 9 of the market share, and the remaining 5000 are silent majority, how do they survive?

Many people in the industry think that the 5000 group buying websites will eventually fall over 95%, which may not be alarmist.

A brutal fact is that many websites have already been put out early in 2010.

Last autumn, the China Electronic Commerce Research Center released an investigation report. It pointed out that 265 websites of 1215 group buying websites in China were closed down, with a proportion of 21.8%.

It is reported that the reason for the collapse of these group buying websites is that capital chain breaks are particularly prominent, and even some of the owners of websites have fled.

Many websites have already been in a semi closed state, and no pactions have been generated within months. The founder of these websites has already begun to undergo pformation. They only occasionally hang up a list, and others have become pure scam websites. The front desk data are all forgery, only for "fishing". The "fish" here may be consumers, or may be opportunists seeking opportunities for acquisitions.

Although many small and medium-sized websites are on the brink of death, they may soon face the plight of mass rapid death. But some websites are like fish in water. They even have taken the lead in the US, the handshake and other giants to make profits.

Feng Xiaohai told reporters: "many small websites with only a few people only serve a very small geographical area. They know what trades they can do, how big they can do, and how well they control the cost. They have begun to make profits.

They take different routes with big websites, and there should be no future competition relationship. "

"There will definitely be a part of the death, but if we lose 100, there will be another 50. There is a lot of room for this industry."

Feng Xiaohai said.