Chinese daily deals sector matures

20 January 2012

BEIJING: The highly competitive daily deals sector is starting to mature in China, as the leading websites exert a tighter hold on category sales.

Dataotuan, the analytics firm, tracked the performance of 125 platforms in this burgeoning industry, covering 345 cities in mainland China, and the 5,000–10,000 offers made available every day.

It reported that Meituan took a 10.8% share of revenues over 2011 as a whole, beating Lashou on 10.7%, 55tuan on 8.2%, 58tuan on 8.1%, Dianping on 7.4% and Manzuo on 6.3%.

Nuomi claimed 6.2% of sales, ahead of Ftuan on 5.9%, 24quan on 5.3% and Diatuan on 2.9%, making up the top ten. Collectively, this group received 71.8% of revenues, rising to 88.5% for the top twenty.

"There are two kinds of deal sites in China," Dataotuan's study said. "For now, independent websites like Meituan are leading, but it seems that affiliated deal sites like Nuomi are catching up.

"The big deal websites are diversifying into different business models to survive in this very competitive market. Some plan to become a sales channel, others an online shopping mall and you also have those that stay focused on local services deals."

More specifically, the research revealed the top ten sites increased their market share from 60.5% in the first quarter of 2011 to 72.6% in the fourth, totals standing at 71% to 93.2% for the top twenty.

Such data showed the group buying market is becoming "concentrated", partly as a consequence of the difficulties resulting from intense rivalry and low margins.

When compared with other Asian markets, the daily deals available in China had the lowest average price, of $21.70, but the strongest sales numbers, at 460 per offer.

By contrast, web users in Singapore were usually required to spend $58.80, the highest price in the region, and yielding around 134 purchases for each promotion.

In Malaysia, the typical deal commanded $35.30, and saw 134 people choose to take part. These figures stood at $50.10 in the Philippines, but uptake rates were generally greater, on 371.

Taiwan was largely at a mid-point, as the average offer presented to web users carried a price of $23.50, and 289 shoppers splashed out on the goods and services concerned.

Data sourced from Dataotuan/Penn Olson; additional content by Warc staff