Trouble Lurks in China Group Buying, as Gaopeng Drops Baidu 高朋停止百度的广告投放团购行业初露窘相

By newsdoug on July 28, 2011

Gaopeng dumps Baidu, Google Competition appears to be getting stiff in the Chinese group buying space, with word that Groupon-invested Gaopeng is dumping its paid search spend on both Baidu (Nasdaq: BIDU) and Google (Nasdaq: GOOG) because they have simply become two expensive. (English article) The reports cite unnamed sources, but if true, the news is significant because it marks the lightest sign of trouble in the vibrant group buying space. It could also be an early warning sign for Baidu, which is trying to squeeze more money out of its advertisers as growth in the new sign-ups for its advertising services slows. (previous post) Regular readers will recall that group buying sites were all the rage among venture capitalists earlier this year, with three sites, Dianping, 55Tuan and Lashou raising $500 million combined, as global leader Groupon also entered the China market by forming Gaopeng together with Tencent (HKEx: 700). 55Tuan became the first company to show signs of trouble when reports emerged earlier this week that at least 3 major investment banks were refusing to underwrite its planned IPO due to accounting concerns. (previous post) This latest report on Gaopeng would seem to reinforce that group buying is not quite as big in China yet as all the hype, with Gaopeng itself only generating a relatively modest 30 million yuan per month in revenue. I wouldn’t be surprised to see one or two of these group buying sites combine within the next year as competition remains intense. Meantime, Gaopeng’s dumping of Baidu could also be an early warning sign for China’s search leader, which could start to see similar defections as companies balk at paying Baidu’s higher ad rates. Baidu said earlier this week that spending from individual customers grew by more than 50 percent in the second quarter (previous post), and clearly some customers like Gaopeng are not happy with those big increases and are looking for more cost effective ways to advertise.

Bottom line: Gaopeng’s dropping of Baidu’s paid search services reflects both intense competition in the group buying space, and also a coming wave of defections by cost-conscious Baidu advertisers.

中国团购行业的竞购看似日益激烈，有传言称，Groupon投资的高朋网因费用太高已停止在百度<BIDU.O>和谷歌<GOOG.O>的广告投放。报导援引了匿名消息人士的说法，但若真有此事，这则消息可谓重磅，因这意味着中国如火如荼的团购行业初露窘相。这可能也是对百度的一个早期预警，百度正试图向其广告客户收取更高的费用，因其广告业务的新签订单步伐放缓。经常看我博客的读者应该还记得，团购网站今年早些时候可谓风行一时，大众点评网、窝窝团和拉手网三家网站共募得5亿美元风险资金，与此同时，美国团购网站Groupon携手腾讯<0700.HK>成立了高朋网，进军中国市场。窝窝团是首家显露困境的团购网站，本周早些时候有报导称，至少三家国际投行因担心会计问题而拒绝代理其上市业务。这则关於高朋网的最新报导似乎再次说明，团购在中国的发展并非像炒作的那般声势浩大，高朋网一个月的营收也仅有3,000万元。随着竞争的白热化，倘若未来一年内有一两家团购网站合并重组，我将不会感到意外。同时，高朋放弃在百度投放广告也为百度提了个醒儿，面对百度不断上涨的广告费用，很多公司犹豫不决，百度或将开始看到类似的“倒戈”会不断出现。百度本周早些时候表示，第二季度个人客户的广告费用增加逾50%，很明显，高朋网这样的一些客户对百度大幅增加广告费用的举动很不高兴，并正寻求性价比更高的途径进行广告宣传。

一句话：高朋网放弃在百度投放广告不仅反映出团购行业的激烈竞争，而且也说明百度或面临一波广告客户“倒戈”风潮。