Web portals want in on group shopping boom
- Source: Global Times
- [10:50 July 12 2010]
- Comments
Group shopping website Kutuan.com is negotiating with some domestic Web portals over cooperation. Photo: Global Times
By Zhou Mi
Popular Web portals Sina and Tencent have both approached group shopping website Kutuan.com to talk about cooperation opportunities, the Global Times learned Sunday.
"We are still in talks with Sina and Tencent," said Xia Jun, a partner in the Hangzhou-based Kutuan.com, which plans to launch a Shanghai service this month. "The possible forms of cooperation include them buying shares in our company." He added that no deals have been sealed and details are not available now.
Sina, Tencent and another major portal website, Sohu, have all moved to grab a slice of the booming group shopping website sector in China.
On June 21, Sohu became the first portal website to launch a group shopping ser-vice, named tuan.sohu.com. Tencent launched its group shopping service, tuan.qq.com, in Shanghai on July 9. Sina's group shopping service is due to be launched today.
The boom of group shopping websites in China was prompted by startups trying to ape the model of Groupon.com, the US-based group shopping website. Such sites make agreements with suppliers by which they can offer discounts to users who sign up for a specific deal. The deal only becomes available if enough people sign up for it. The websites earn money through commission on the sales.
Websites using the same model had surged to over 300 by June, according to data from Analysys International, a Beijing-based Internet consulting company.
Xia told the Global Times that Web portals will find it hard to crack the group shop-ping market unless they buy up or cooperate with an existing group shopping service. "The most important factor in running such a business is to find suppliers who are willing to offer discounted products in a bid to promote their brand," said Xia. "The business requires us to put emphasis on operational teams in each of the cities where we have a presence. Market penetration will be a challenge for large portal websites."
Kutuan launched on May 28. Zhang Wei, founder and CEO of the website, told the Global Times previously that it will enter the Shanghai market by setting up an operational center in the city.
