Group Buying Growth: Emerging And Out Of Control Is A Necessity.

No one.

"Our advertising budget this year is at least 200 million, and the handshake net is 200 million. The whole industry is sure to exceed 1 billion."

Shen Boyang spoke very fast and did not evade the data. He had made up his mind to face it.

Shen Boyang is the deputy of thousand oak interactive group.

Even without such specific figures, the emergence and overflow of group buying is hard to ignore.

Take Beijing as an example: bus stops, subway advertisements, building advertisements, and even CCTV, there is no need to mention online advertisements.

Full of brain platinum from group buying websites.

Let's take a look at a set of data. In the past year, financing in the field of e-commerce, 1/3 has invested in group buying: the handshake network has received 55 million dollars and two rounds of financing, the US group has got 15 million dollars and two rounds of financing, and the full seat network has received $10 million financing.

According to the approximate statistics, a total of 12 financing for group buying websites has been obtained in one year.

Capital strengthens the Matthew effect: since January 2010, the first real group buying website has been set up [A1], so far, there are more than 2000 group buying companies, with annual sales of over 4 billion yuan, expanding hundreds of cities.

As a tributary of e-commerce, why group buying is so fierce? From the perspective of all sides, it seems that the next "Big Bang" is born in business mode.

The group buying at this stage can be described in a word: network brokers promoting local service pactions.

Through low-cost means, local services will be supplied to local consumers.

Local businessmen hope to gather enough popularity to attract repeat customers, and consumers want more cheap services and goods to meet the needs of clothing, food and shelter.

According to the Groupon mode of the group buying model, the group buying is different from the existing B2C or C2C websites.

Group buying mainly promotes the paction of local services, enabling you to eat, drink and play, not standardized products.

Some people in the industry directly define the value of group buying websites to meet the demand of precision marketing for local service businesses.

As a marketing service, group buying has an inability to resist the temptation: it pays according to the paction.

In other words, only when a paction takes place, a businessman will have to pay the corresponding cost (due to a loss of commission due to low price sales and the offer to the group buying website). If the price is set skillfully, it may achieve both small profits and win back.

The reason why search engine can make the richest person is that it can solve the problem of matching information by algorithm, thus promoting the accuracy of marketing.

Advertisers are willing to spend advertising fees on search engines in exchange for real clicks.

Although clicks do not necessarily turn into pactions, advertisers have seen clicks, which are better than what they did not see in the past century.

Now, there is a new model that can be further upgraded - advertisers pay for pactions.

In addition to the wonderful evolutionary energy contained in the super organism of the Internet, an Internet giant is coming out of the group buying.

How can the capital be no blood?

It is a pity that unlike the search engines, the group buying website does not need the sophisticated algorithm that needs to be locked to the Bank of Zurich.

The entry threshold of group buying is so low that practitioners sometimes feel embarrassed to call themselves TMT. The minimum requirement for a group buying website is: a computer and a group of merchants willing to buy.

The prospect is broad and easy to copy. This is the reason why the industry has been plunged into the all-around war of blood.

In the interview, everyone admitted that the threshold of group buying was low. At the same time, they would add that the threshold for further competition will only be higher and higher.

Compared with video and traditional e-commerce, group buying is a more naked game of rich people.

The core of competition in the next stage of the group buying is the scale. The scale depends on the conversion and retention of users, as well as the development of the market and merchants.

All of this will depend on how much money the group buys.

CEO Wu Bo, who is most optimistic about the group buying industry competition expectation, believes that the current group buying industry's competition is mainly the competition of the first 5.

Most of the rest of the group buying websites still believe that the long distance run of group buying industry is just beginning.

Standing at this point of time, it is really difficult to predict the final winning or losing of group buying websites.

As another new species catalyzed by information technology, group buying website was born with the emergence of "emergence".

The result is that individuals are ultimately coerced and must be followed by collective irrationality.

For example, a refund; for example, at the beginning of the article, Shen Boyang said that he had smashed advertisements.

Among them, we summed up the key words of several group buying websites in 2011:

1. national enclosure

The most obvious feature of group buying industry is rapid expansion across the country.

The handshake net has already been wired under the 130 cities of the whole country. The group of the United States has 48 teams under the wired team, and there are 35 cities stationed in the sticky rice net.

They opened more than 100 cities.

Other group buying websites are also unwilling to be lonely. The top ten group buying websites with the lowest number of public comment teams have also been stationed in 9 cities.

This expansion will not stop this year. Glutinous rice net hopes that more than 80 people will be stationed in the city under the promotion line this year. Wu Bo, CEO of the handover network, said that the staff will eventually be more than 10 thousand, and will be stationed in all parts of the country.

National expansion not only expedites the capital threshold of group buying industry, but also is the natural demand of group buying industry.

The characteristics of group buying industry is to provide precise marketing for local life service enterprises, and to have local businesses and local customers. This characteristic is similar to that of express industry.

And the profit mode of group buying website is simple: at present, the old way of Groupon is basically taken: Commission, advertising fees, and this profit mode has greatly reduced the difficulty of copying websites.

In addition, the group buying industry is in the initial stage of development. Many cities are "virgin land" for group buying industry.

However, the footsteps of group buying websites nationwide are limited by several aspects: local consumers and businessmen 'recognition, funds and personnel for group buying.

This has led to second key words in the group buying industry: advertising and capital competition.

2. advertising war

Advertising cost is undoubtedly one of the focuses of group buying industry competition in 2011.

It can be seen from the published data that the public comment group announced that it will produce 300 million -4 billion yuan for publicity expenses. The waxy network said that this year's advertising cost will not be less than 200 million yuan. The US group will pay 130 million yuan for brand promotion, and F group CEO lin ning also said that the advertising expenses this year will not be lower than 100 million yuan.

More than one group buying website CEO has put forward that the high advertising cost is for defensive purposes.

With the enclosure of various websites of group buying websites, the advertising of group buying industry is not only for local consumers, but also for local businesses.

One of the characteristics of group buying industry is that cash flow is abundant. This abundant cash flow is derived from the prepayment of customers when group buying, and the account period that group buying industry gives merchants payment.

This requires the dual trust of consumers and businesses.

Therefore, glutinous rice net, F group and handshake net all choose CCTV to promote advertising.

Behind the advertising war is a war of funds, which has virtually raised the threshold of the industry.

"Don't play group buying without money."

Shen Boyang said so.

Whether funds will become the driving force of irrational competition, we think the answer is also positive.

In the interview, more than one group buying website CEO questioned the current advertising war, and thought that the price of all aspects of advertising had been raised.

Wu Bo said the cost of bus advertising has increased by 30% in the past year.

Shen Boyang said the cost of online advertising has doubled over the past year.

3. SNS

On the one hand, the group buying industry needs to open up the market, and on the one hand, it needs to maintain the number of existing customers.

According to the statistics of AI consulting, the proportion of old customers who focus on group buying is only 33.7%, which is lower than the proportion of 46.8% of new customers.

This is due to the fact that the Internet is naturally open and the user stickiness has always been low. On the other hand, the group buying industry is similar to a cheap consumer promotion platform, and users are more sensitive to price factors.

Therefore, many industry players hope that SNS can enhance the interaction between users, improve the cost of customer conversion group buying, and thus increase user stickiness.

Many CEO in the interview said they had developed or prepared to develop SNS related systems.

We think the question worth pondering is: first, does SNS really help to enhance user stickiness? Secondly, how to make good use of SNS? If we develop SNS platform, we need not only to ensure technological development and capital investment, but also to think more closely about SNS and group buying.

If we use the existing SNS platform, how can we break through? After all, it is a thousand regiment war.

4., based on the full range of meals and videos.

In the interview, we found that when CEO talked about the most impressive group buying cases, they focused on two aspects: Catering and movie tickets. At present, these two types of group buying are still the mainstream of paction.

According to the statistics of group 800 to 15 major group buying websites, in the 1-2 month of this year, the catering industry in Beijing is still the most popular group purchase classification of group buying websites. The number of on-line trips reached 372 in the Beijing area, with sales of 39 million 916 thousand yuan, accounting for more than 40% of the 838 group buying activities and 90 million 541 thousand yuan sales volume.

Movie tickets have become a sharp weapon for group buying websites to hit 100 thousand sales, such as the January 12th movie ticket group buying of glutinous rice net, with 120 thousand people buying.

However, this situation is showing signs of improvement.

Group 800 statistics show that tourism group buying in 1-2 months (especially the hot spring leisure projects around the city) shows a trend of popularity, and its higher unit price still makes it a considerable sales volume for entertainment group buying.

CEO also said that as long as consumers need it, "we can do laundry."

Comprehensive industry is the inevitable requirement after the group buying industry continues to develop.

Zhang Yanan, an analyst of the group buying industry of the Institute of clear science, said that with the continuous development of merchants, the group purchase industry is bound to become a cheap commodity provider in all aspects of food and clothing.

5. verticality

If the omni-directional service provides the basic service for the consumers, then the vertical is the differentiation competition of the group buying industry.

At present, the F group has launched holiday, parent-child and pictorial channels. The handover network has launched cosmetics and hotel group buying channels, while CEO of other group buying websites are also considering some industries vertical.

It can be expected that group buying industry will not stop vertically.

But we believe that the difference competition that ultimately leads to success is not driven by the group buying website itself, but by the development of the whole group buying market.

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CEO questions and answers

Wu Bo handle net CEO

Shen Boyang, general manager of glutinous rice net

Director and senior vice president of Longwei public comment network

Huang Zhihua Ya Ya CEO

Yan Limin Taobao Juhuasuan group buying platform director

Ding Yongxing, director of Sohu love family group

Deng Huajin Qijia network CEO

1. do you agree that the pattern of group buying industry is three points?

Yan Limin: I think there are at least four forces. The first force is the platform, with Taobao Juhuasuan as the representative.

We will attract many domestic practitioners to do group buying, and everyone will compete at a fair starting point.

The second force is the independent group buying website, for example, the top ten players in the country are like the handle and the US regiment.

The third force is the media, they can not be overlooked, not only the portal website, but also the traditional media under the line.

The fourth category is Tencent and Groupon joint operation of Gao Peng network.

Deng Huajin: the current group buying market is mainly concentrated on service products, and everyone is growing up in barbarism.

At present, several websites have done larger scale, and have formed a stable user group. However, from the perspective of a business chain, it is far from mature.

For a business, there are no links between pre sale, sale, and after-sale links.

Everyone is still in the extensive stage, the scale of competition is still in scale. Next year, we will start the management of competition background.

Ding Yongxing: I think independence, portal and comment on these three group buying websites can survive.

Relatively speaking, vertical independent group buying websites will be more competitive.

Because it is not interconnected with other businesses.

In addition to the websites we are familiar with, it is very difficult to expect new ones to follow.

It is very likely that one or two of these families are screened out.

However, this is basically maintained by the rice Unification, comment and 58, and the portal class also maintains this state.

First, there will be no new entrants.

Second, it will not be out.

2. the industry gained large scale financing last year. The expansion of the industry companies is very fast, but at the same time, the industry is shuffling.

Do you think the turning point of the industry has arrived?

Yan Limin: in the 1000 regiment war, those independent websites should be gathered on the platform. If it is done independently, it will find the environment not so good.

I think the e-business of service industry is irreversible, but resources are always scarce.

Long Wei: the future pattern (the rest) is single digit. It will not be more than 3 accurate. Only two or three really survive.

But there may be some local group buying websites that may have some foundation for survival.

Large websites, covering the whole country, will not exceed one digit, only two or three.

Ding Yongxing: is it possible to get the second and third round of financing for the independent group buying website is a big turning point.

After the year, the publicity efforts of various websites are very large.

We saw some advertisements.

Such an investment is not enough to support the rapid development of his business.

Because just like CCTV, CCTV gold advertising has made many enterprises, but it has also destroyed many enterprises.

The market has a critical point for individual enterprises, which is hard to judge.

Wu Bo: this year the competition will be more intense. There will be vicious competition. The threshold for group buying will be higher. The group buying website still needs to lose money, but eventually it will develop healthfully.

I think there will be 5-10 national group buying websites in the future.

3. when do you expect the company to make profits?

Yan Limin: we have no consideration for charges this year.

I think this market is still in the early stage. Taobao's request to me is to support the industry to start, not to do harvesting now.

Ding Yongxing: one of them is direct income and indirect income.

Direct gains, at least within this year, we did not intend to do so.

Next year, it's possible to see changes in the market.

For example, gross margin is not to say that we want to say gross margin 30% or 50%, we must rely on the market to accept.

Long Wei: the public comment network was made in October 2008. We earned $10 million in 2009 and $30 million in 2010. In 2011, we expect to be 120 million -1.5 billion, 3-5 times.

We do not split up the group buying business, but as part of the integrated marketing plan, there is no need to split it.

But a rough estimate is that the proportion of group buying business in total revenue is about 30%-40%.

The overall profitability of the industry will wait until the end of this year until the players in the industry are left with a single digit.

I think this year we should play in the group buying industry, not backward, not eliminated, at least 500 million yuan is necessary.

Shen Boyang: group buying is definitely a huge loss at present, but it can not be said that the group buying pattern is not right. When competition reaches a certain stage, gross margin will be gradually raised, or find other ways to make money.

After all, so many rich white-collar workers are still worried about not making money? But at the moment, it is impossible to claim money.

Wu Bo: profitability is hard to say. If there is another Groupon vicious competition, when can you say that you can make profits? Definitely not profitable this year.

At present, there are some merchants who want to sell many copies of the group purchase. We sometimes think about it. For example, at least 1000 copies, we buy 200 copies for the employees.

There are many lists that are flat and unprofitable, even discounted sales.

4. do you think there is some possibility of evolution and innovation in group buying now? Some group buying websites are intermediaries, and some are big wholesalers.

This model continues to evolve. Are there any variants now, or are we playing differently?

Ding Yongxing: I think there will be.

Store their own goods and sell them, and now the reverse mode has.

There are also a lot of electricity providers starting to do group buying. He hoarding a pile of goods himself is a marketing channel for the electricity supplier. He takes a lot of things out to do group buying.

I think it's possible for you to say the other way around.

Just like commenting on group buying, some group buying websites have made comments in the past.

Shen Boyang: if we innovate the model, we think that since we are doing group buying, we should make deep use of this thing, and do not make great changes easily. Don't rush to open other channels, which will be very risky.

The group buying model has proved to be successful in foreign countries, and it is also successful in China at present. Then we should continue to do this pattern well and do not change it easily.

But there is bound to be a change in the pattern. We are also trying something new, like coupons.

Huang Zhihua: I didn't agree to do group buying in stock before, but now there are stocks doing it.

Our office space is also enough.

This layer is bought by us, 1000 square meters, so warehouse space is enough.

The original alliance power is real estate, not only here, we also have property in other parts of Beijing.

5. what changes do you think will happen to the industry in 2011?

Yan Limin: I think those powerful chain service industries will skip the group buying website directly to consumers.

Like McDonald's, like Haagen Dazs, they shop directly on Taobao, do group buying is also done by themselves, do not need third parties.

Of course, the service industry in small and medium-sized cities still needs some independent group buying websites to help promote.

I think the group buying website will gradually evolve into an Amoy partner, that is, the operator of group buying activities.

This is my judgement of the pattern.

Deng Huajin: the business system of group buying industry is developing very fast, and its speed is extraordinary. Many people can't understand it.

But there is no way for a business to mature in such a short time.

The growth of these group buying websites has gone beyond my expectations. I dare not predict the future pattern, but its speed will certainly exceed my prediction.

Ding Yongxing: first, there will be some changes in the participants.

It depends on the speed of their development and the financing situation of the market. Second, the user psychology is becoming more and more mature. Users are gradually getting mature for what group buying products we buy, what group buying businesses and what group buying platforms. Third, the biggest change should be businessmen. Through so many group buying websites, so many users, such a long time of groping and touching, will be more rational.

Long Wei: there will be a large number of group buying websites to be eliminated this year.

The reasons for changes in the industry: the first is the maturity of the market, the maturity of the commercial end and the user side.

After more than a year, businesses now find that group buying is not so wonderful, not so good, but will bring huge operational pressure.

For consumers, it is also gradually sober up, for example, if the order is not in place, group purchase to inferior products, and imagination do not match; second factors, the big group buying website, the industry leader, has already stood in the first tier, then the next is very difficult to survive.

Winner takes all.

Do consumers go to famous websites or small websites? Third, it is very important that a large amount of funds come in, thus raising the threshold of group buying.