The group buying market in China is steaming hot, but without Groupon as a major player for the time being. Helen Wang analyzes in Forbes the chances of the US company in the world’s largest internet market.
When a bellman in a Shanghai hotel advised me to get a breakfast coupon from Lashou.com, a Chinese group-buying site, for less than half the price, I knew that social commerce had gotten into the hearts and minds of Chinese consumers. It’s not surprising that thousands of group-buying websites sprung up in less than a year in China’s chaotic cyberspace. According to JP Morgan, the group buying market grew from zero to more than $150 million in 2010, and is expect to reach half a billion dollars in 2013…
Gaopeng [the Chinese name of Groupon] also faces tough competition from Lashou.com and other group-buying sites. Lashou is founded by a seasoned Chinese entrepreneur and backed by U.S. venture capital firms SGR and Milestones – both are experienced in Chinese technology ventures. Its momentum is strong after raising $110 million in series C funding in April. So far, Lashou seems to have done everything right. It is expanding rapidly to 2nd and 3rd tier cities, setting up call centers and logistics, and enhancing customer services.
Gaopeng certainly has an uphill battle in China. Some analysts have already written it off to a fate similar to eBay, Yahoo, and Google (not in bad company, all world class organizations ).
However, China’s Internet market is too significant to give up. In less than a decade, China’s Internet users could reach as many as 750 million and China’s consumer market could reach $16 trillion. A burgeoning middle class has fueled a consumption boom. Retail marketplaces are spreading in urban areas like wildfire. E-commerce has been growing 60 percent per year in recent years.
More advises for Groupon in Forbes.
- Opportunities for US companies in China – Helen Wang (chinaspeakersbureau.info)
- Where to make money in China – Helen Wang (chinaspeakersbureau.info)
- China Daily reviews ‘The China Dream’ – Helen Wang (chinaspeakersbureau.info)
- The yin and yang of the Chinese Dream – Helen Wang (chinaherald.net)