CNNIC: China’s Internet Group Buying Users Reached 42.2 Million

The China Internet Network Information Center has published a report on the activities of Chinese group buying users for 2011 in Beijing, stating that by June 2011, there were 42.2 million online group buying users in China, an increase of 125% compared with six months ago.

Meanwhile, 8.7% of Chinese netizens have used the highly saturated group buying services.

According to the report, Chinese netizens prefer group buying of dining, entertainment, commodity and digital products. For details, 73.5% of group buying users had purchased dining services via group buying websites; 58.5% bought leisure and entertainment services; 43% bought home supplies and commodities; 28.4% bought digital products; 27.2% bought beauty and health products; 15.3% bought hotel and travel services; and 10.8% bought outdoor sports facilities.

The report said dining and entertainment services are still the mainstream products in the Chinese group buying industry. However, group buying of physical products developed fast and 59.9% of Chinese users have bought physical products from group buying websites.

The report also revealed that 68.5% users gained group buying information from navigation websites; meanwhile, some group buying websites gained loyalty of users and 52.2% of them chose to login to particular websites. In addition, other channels like email marketing, Internet advertising, and search engine advertising played important roles in providing group buying information. For details, 32.4% of users subscribed to group buying information by email; 30% gained the information from the shopping websites; and 25.1% from Internet search.

In regards to the factors that influence the choice of users, the report said discounts ranked first. It is said 85.4% users believe discounts and cheap goods are the most important factors that influence the number of participants in a group buying deal. Demand ranked second with support of 57.9% users and the locations where the services offered ranked third with support of 52.5% users.

Females are the major buyers in group buying, accounting for 53.9% of total users; most group buying users are aged between 20 and 39, accounting for 73.5% of the total; and those with bachelor and higher degrees accounted for 35.9%.

During the survey, 80.3% group buying users said they trust group buying websites, and 87.1% expressed their satisfaction about group buying services. In addition, users have a positive expectation when engaging in group buying. 82.1% of them said they will definitely participate in group buying in the future, and 14.8% said they will probably participate.

The report pointed out that there were severe problems in the Chinese group buying services though the overall recognition was fine. Statistics showed that 45.6% users had unhappy experiences, including inconsistency between the descriptions and the actual products; bad attitude of vendors; delayed delivery; false information on group buying websites; and refusal of services by vendors.

Most importantly, many Chinese retailers have become upset with group buying business models in China because too often they lose money on the group buying promotions while at the same time not able to build a loyal clientele among the users of group buying websites. Ultimately, these retailers gain little or nothing from conducting these types of campaigns. As more retailers opt not to use these group buying websites as promotional channels, the websites will have greater difficulty in sustaining their businesses.

By the end of May 2011, Chinese group buying navigation website Tuan800.com estimated there were about 4,500 different group buying websites in China.