Companies have been filling the airwaves with 2013 sales and revenue targets these last few weeks as the new year gets underway, with smartphone maker ZTE (HKEx: 763) and top group buying site Meituan becoming the latest to add their forecasts to the list. In ZTE’s case, the company seems to be taking a smart approach to its newer, fast-growing smartphone unit by shifting its focus to improving margins and making the business profitable sooner rather than later. Meanwhile, Meituan’s announcement of extremely aggressive sales targets seem to reflect the company’s confidence that it will emerge stronger than ever from the painful consolidation now gripping China’s group buying sector.
Tag Archives: Meituan
Group Buying Shake-Up Hits Qianpin 团购行业洗牌风潮袭击千品网
It may be a new year, but there’s nothing new about the latest development in the group buying space where an ongoing cleanup has claimed one of the biggest victims yet with reports of mass layoffs at a mid-sized player called Qianpin. This latest shake-up is part of an ongoing retrenchment that has now reached its late stages, and I do expect we’ll see 1 or 2 more major fireworks in the next 6 months before this long and painful consolidation wraps up around the middle of the year.
Latest Group Buying Turmoil Shows Up at 24quan, Meituan
It’s Thanksgiving day in the US, but people in China’s turbulent group buying sector have little to be thankful for, as intense competition appears to have claimed a new victim in the form of a sub-site operated by 24quan. (Chinese article) According to Chinese media reports, the sub-site, called Zhongshan Zhan, has suddenly shut down and its merchants are refusing to honor its coupons. I checked 24quan’s main website (www.24quan.com), and it appears to be still functioning normally, so this report appears a bit unclear about what’s really happening at the parent company. But regardless of the specifics, this latest report, which cites a number of irate customers, reflects the current turmoil afflicting China’s group buying space, where consumer complaints are frequent and companies are bleeding cash. Industry leader LaShou’s pending New York IPO appears to be indefinitely suspended, as the US securities regulator looks into accounting issues (previous post), and there’s no sign that 55tuan, another major player, will be able to make its intended US IPO before the end of this year. (previous post) Another new media report reflecting the current chaos says that a site called Meituan has suddenly started offering all employees who have worked there for 6 months or more stock options. (English article; Chinese article) The company apparently denied the move was related to an upcoming IPO, which doesn’t surprise me. I suspect the move instead means something entirely different, namely that Meituan is worried about its own finances and is using these options as a way to retain employees who might be worried that their company might not survive long enough to make those options worth anything. The report says the options don’t vest until 4 years — which looks like an eternity in the current market. I would honestly be surprised if more than 10 percent of the current crop of group buying companies are still in business 4 years from now, and I’m guessing that Meituan won’t be among that small set that survives the upcoming industry clean-up which should begin in earnest in the next 6 months.
Bottom line: Reports of the shut-down of a unit of one popular group buying site and option awards at another are the latest signs of turmoil, which will result in an industry shake-up very soon.
Related postings 相关文章:
◙ Latest Group Buying Confusion Shows State of Chaos
◙ LaShou Shifts Focus in IPO March 拉手网在上市准备中有意转变战略方向
◙ Lashou Files For IPO, Launching Race With 55tuan 拉手网与窝窝团打响IPO竞争战
News Digest: November 25, 2011
The following press releases and media reports about Chinese companies were carried on November 25. To view a full article or story, click on the link next to the headline.
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◙ Group Buying Site 24quan Closes, Thousands of Users Refused Service (Chinese article)
◙ Alibaba (HKEx: 1688) Third-Quarter Profit 410 Million Yuan; In Line With Estimates (English article)
◙ Group Buying Site Meituan Issues Options to Employees – Source (English article)
◙ China Workers Strike at Lingerie, IBM (NYSE: IBM) Parts Factories Demanding More Pay (English article)
◙ China Telecom (HKEx: 728) Gets China Rights for iPhone 4S – Source (Chinese article)
