Latest Group Buying Confusion Shows State of Chaos
I wanted to end today’s postings on a lighter note, looking at some of the latest silly reports coming out on the group buying industry that show just how unruly this sector has become and how it is badly in need of a clean up. In one of the latest reports, domestic media are saying McDonalds (NYSE: MCD) is denying it entered any tie-up to sell its meals at group-buying discounts through Gaopeng, the struggling group buying joint venture between newly listed Groupon (Nasdaq: GRPN) and leading Chinese Internet firm Tencent (HKEx: 700). (English article) It’s not at all clear what happened in this case, as the reports say that Gaopeng was offering just such deals to Beijing residents, so either the reports are wrong or McDonalds or Gaopeng are lying. Either way, this news once again underscores the chaos in the sector, whose credibility is near zero in the eyes of many consumers. In another report which looks almost like a joke, a consumer is complaining because he purchased a group-buying restaurant coupon on popular site 55tuan, and then asked for a refund when he failed to use the coupon by the expiry date, only to be told by 55tuan it didn’t provide refunds in such instances. (Chinese article) If 55tuan wanted to improve its image, it might actually consider a refund for this stupid consumer, who obviously doesn’t realize that a big piece of the profits for companies that offer group discounts probably comes from purchases of coupons that later are never used. Still, the fact that 55tuan, and probably none of its competitors, would offer refunds in this kind of case also reflects that the entire industry is losing big money due to overheated competition, and is badly in need of a clean up. The turbulent state of things was evident last week when industry leader LaShou was forced to temporarily halt its rocky New York IPO, reportedly to answer questions from the US securities regulator about its accounting. (previous post) I predicted that LaShou’s IPO application will probably now be quietly withdrawn and perhaps resubmitted next year. Of course that assumes that LaShou will still be in business next year, as I do sense that the group buying sector’s long awaited “correction” is likely to begin by the end of this year, leaving many casualties when it finally comes.
Bottom line: The latest reports of controversy in the group buying sector reflecting a state of near chaos in the space, with a correction likely as soon as the end of this year.
Related postings 相关文章:
◙ LaShou Shifts Focus in IPO March 拉手网在上市准备中有意转变战略方向
◙ China Regulors Threaten E-Commerce, Group Buying 官方监管威胁到电子商务与团购业务
◙ 55tuan: A Company in Denial 窝窝团拒不接受现实
