Tag Archives: group buying

Meituan Gets New Funds, Eyes IPO

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Meituan raises $100 mln

After a 4 year cycle that saw China’s group buying sector first boom and then crash spectacularly, we could finally see an IPO soon from Meituan, which has emerged as the industry’s leader and a true survivor. Media are reporting that Meituan is close to getting $100 million in new funding — an admirable feat in the current climate that has seen investors largely shun the group of former high flyers. That investment would come just weeks after leading Internet firm Tencent (HKEx: 700) purchased 20 percent of Dianping, another strong player that has emerged in the group buying space. (previous post) Read Full Post…

Wanzhong Falls As Group Buying Cleanup Nears End

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Wanzhong becomes latest group buying victim

Some new figures are showing just how dramatically China’s group buying sector has contracted over the past year, with word that another major player Wanzhong has folded due to lack of funds. Wangzhong’s closure comes as the number of group buying casualties finally starts to slow, simply because so many have now left the space. I do expect we’ll see at least one or two more major closures or mergers this year, and previously predicted that former high-flyer LaShou could be one of those. But that said, the year could also see 2 or 3 major players finally emerge that have the potential to make IPOs and post strong long-term growth, similar to what we’ve seen recently from global sector leader Groupon (Nasdaq: GRPN). Read Full Post…

Baidu Eyes Group Buying With Nuomi

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Baidu eyes Nuomi investment

Barely a month goes by these days without rumor of a new acquisition target for Baidu (Nasdaq: BIDU), which suddenly seems anxious to buy up major assets in its bid to diversify beyond its core search business. The latest rumors say Baidu is close to a deal to purchase Nuomi, the group buying unit of social networking leader Renren (NYSE: RENN). As one of China’s most profitable Internet companies, Baidu is hoping to take advantage of low valuations of Chinese Internet firms, many of which are running low on cash and have had trouble attracting interest from foreign investors. Baidu, by comparison, has plenty of resources to make such purchases, including $2.5 billion in cash from 2 recent major bond sales. Read Full Post…

Lashou Files For IPO, Launching Race With 55tuan 拉手网与窝窝团打响IPO竞争战

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The race to make an IPO by China’s top 2 online group buying sites, Lashou and 55tuan, has officially begun, with Lashou taking the early lead by making the first public filing for an offering to raise up to $100 million. (English article; Chinese article) The only problem is, this is a race that could very well see neither player ever reach the finish line, as both companies are hemorrhaging cash and investors are very unlikely to show interest in either, regardless of how low the selling price. According to its first public IPO filing late last week, Lashou, which is trying to polish its image by adding a capital “S” and calling itself “LaShou”, lost a hefty 391 million yuan, or about $60 million, in the first half of this year. With competition incredibly fierce in China’s group buying space and all kinds of quality issues and a potential government crackdown looming (previous post), Lashou’s situation is unlikely to improve anytime soon. I previously received quite a few sarcastic complaints when I remarked that Lashou was forced to turn to a couple of “second-tier” investment banks, CICC and Nomura, for the offering after Goldman Sachs and Morgan Stanley resigned the account citing conflict of interest, amid reports that they were really dubious of Lashou’s accounting records. (previous post) Now we can add Barclays Capital to the list of Lashou underwriters, again underscoring my previous assertion as none of these underwriters is a major New York bank with strong connections in the US and experience in the Internet space. 55tuan has also reportedly hired underwriters for its offering,  though no one is quite sure who they are and no doubt they are even less experienced than Lashou’s trio of banks. Despite that, 55tuan came out very publicly and said earlier this month it plans to make an IPO by the end of this year, even as it was implementing mass layoffs. (previous post) All that said, there probably won’t be any winner in this newest IPO race, as whoever makes it to market first will probably have to sell their shares at a steep bargain to attract any investor interest. At the end of the day, I wouldn’t be surprised if neither company makes it to market at all, at least not by the end of this year.

Bottom line: The latest race to market between online group buying leaders Lashou and 55tuan is likely to yield no winners, as investors give chilly receptions to both struggling companies.

Related postings 相关文章:

◙ 55tuan: A Company in Denial 窝窝团拒不接受现实

◙ Lashou Ropes in Small Potatoes For US IPO 拉手网聘二流承销商赴美上市

◙ Group Buying Turmoil Grows With 55tuan Layoffs 窝窝团撤站裁员 团购业整合在即

Group Buying Turmoil Grows With 55tuan Layoffs 窝窝团撤站裁员 团购业整合在即

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After a week or two of relative quiet, trouble in the group buying space has come bursting back into the headlines with the latest report of mass layoffs at one of the industry’s biggest players, 55tuan. (Chinese article) According to a report in the Chinese media, the company, which was having trouble finding an investment bank in July in its bid to raise new cash with an IPO (previous post), has been forced to close some of its regional offices and lay off 1,500 employees in a number of cities, including Shenzhen, Tianjin and Chongqing. The report also cited one consumer in the Guangdong city of Shaoguan saying he couldn’t use one of his group buying coupons issued by the company, and worrying that all of 55tuan’s coupons might become worthless. A company spokesman confirmed that some smaller outposts had been closed, but insisted that it was business as usual for 55tuan’s group buying website and that unsatisfied buyers could return their coupons for refunds. (Chinese article) Word of the layoffs actually first emerged last month, though the company denied any mass job reductions at that time. (previous post) The woes at 55tuan follow similar mass layoffs earlier this year at Gaopeng, the group buying joint venture between US giant Groupon and Tencent (HKEx: 700), and come as Lashou, another top group buying site, struggles to launch an IPO as it too grapples with fierce competition and a looming cash crunch. (previous post) One source told me earlier this week that 55tuan has finally managed to find an investment bank, though he declined to name the bank, leading me to believe that it’s not a major player. Regardless, the fact that most or all of China’s group buying sites are losing big money will make IPOs by Lashou or 55tuan highly unattractive to investors, who would rightly fear the companies could easily go out of business. Accordingly, I doubt we will see any IPOs by Chinese group buying sites either this year or in 2012, and more likely we’ll see a major market consolidation that will force many players either to combine or close before 2 or 3 large, profitable companies finally emerge.

Bottom line: Mass layoffs by 55tuan are the latest sign of distress in China’s group buying market, with IPO bids by Lashou and 55tuan likely to fail as the sector undergoes a major consolidation.

Related postings 相关文章:

◙ Lashou Ropes in Small Potatoes For US IPO 拉手网聘二流承销商赴美上市

◙ 55tuan Layoff Rumors Mark Latest Group Buying Distress Call 传窝窝团大裁员 团购业前景黯淡

◙ 360Buy $5 Bln IPO Plan Looks Like Desperation 京东商城50亿美元上市计划凸显绝望

 

 

Lashou Begs for an IPO Banking Partner 拉手网拼命寻找上市承销商

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Lashou, China’s top group buying site whose name literally means “join hands” in Chinese, is desperately shopping for an investment banking partner to underwrite an IPO in a sudden race against time among Chinese Web firms to go public before a looming Internet bubble bursts. At least that’s my interpretation of the latest media reports saying Lashou is racing to find new underwriters for the planned offering, after Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS) resigned from the case. (English article; Chinese article) If this news sounds familiar to some of you, it’s because it is. Just last month, similar reports emerged that another leading group buying site, 55tuan, was abandoning plans for an IPO after several major investment banks, including Goldman Sachs, refused to underwrite the listing over concerns about accounting records for some of its previous acquisitions. (previous post) A report issued earlier this week said the group buying space has exploded to 5,000 players this year from just 2,000 at the end of 2010 (previous post), as Chinese companies pile into the latest Internet trend in a bid to become the country’s next Groupon. The only problem is, even Groupon is struggling in the overheated China group buying market right now, laying off hundreds of employees in the last month from its troubled Gaopeng joint venture with leading Chinese Internet firm Tencent (HKEx: 700). (previous post) This new problem at Lashou is just the latest development on a list of signs of crisis in group buying that is growing so long I won’t even bother to repeat them here. But I predicted earlier this week (previous post) that group buying sites look set to become the first domino to fall in China’s dangerously overinflated Internet bubble, and this latest Lashou development just adds more fuel to that argument.

Bottom line: Lashou’s inability to find an underwriter for a planned US IPO is the latest sign of distress in China’s overheated group buying sector, which could enter a full-blown crisis by year end.

拉手网正拼命寻找一家可承销其首次公开募股(IPO)的投行夥伴，加入中国互联网企业争分夺秒赶在互联网泡沫破灭前上市的行列中。这至少是我对媒体报导的拉手网正急切寻找新的承销商助其上市的解读。此前，摩根士丹利(MS.N)和高盛(GS.N)退出了拉手网的IPO承销案。如果你们中有些人觉得这听着很耳熟，原因是这种新闻的确不陌生。上个月就有类似报导称，中国另一家主要的团购网站“窝窝团”放弃赴美上市，因包括高盛在内的多家投行因担心其之前的并购产生的会计问题而拒绝承销其IPO。本周早些时候的一篇报导称，中国国内今年的团购网站数量已经从2010年底的2,000家激增至5,000家，因中国企业纷纷涉足这个互联网新趋势，希望成为中国的下一个Groupon。唯一的问题是，Groupon自己还在中国过热的团购市场中自顾不暇，且上月对自己在中国的合资企业“高朋网”进行了大规模裁员。拉手网遭遇的这个新问题只是团购业种种危机迹象的最新发展。这种迹象有很多，所以我也不想在此反复赘述。但我本周早些时候曾预言，团购网站有望成为中国过热互联网泡沫中首个倒下的多米诺骨牌，拉手网的最新进展只是为这一断言增加了更多证据。

一句话：拉手网无法找到一个助其上市的承销商是中国过热的团购业出现瓶颈的最新迹象。中国的团购业或许在今年年底前陷入全面危机中。

Related postings 相关文章:

◙ 360Buy $5 Bln IPO Plan Looks Like Desperation 京东商城50亿美元上市计划凸显绝望

◙ Group Buying Sites: The First to Fall? 团购网或将在互联网泡沫破灭时应声而倒？

◙ Tax Evasion Report: Trouble Brewing in Group Buying? 团购被曝逃税 行业整顿或在即

Group Buying Sites: The First to Fall? 团购网或将在互联网泡沫破灭时应声而倒？

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I’ve been writing for more than a month now about China’s looming Internet bubble, and a new domestic media report makes a good case that group buying sites may lead the way when this bubble bursts in the months ahead. (Chinese article) According to the report, China’s field of group buying sites has exploded in recent months, with some 5,000 such sites now operating versus just 2,000 at the end of last year. What’s more, an industry executive at one of the top sites, 55tuan, estimated that all of the top 10 players are now losing money, as they rapidly burn through hundreds of millions of dollars in cash raised earlier this year in pursuit of a very limited base of online Chinese shoppers. Those same consumers, with so many sites to choose from, are becoming more and more selective, forcing the sites to offer promotions that are ridiculously cheap and obviously money losing. Gaopeng, the group buying joint venture between global leader Groupon and leading Chinese Internet company Tencent (HKEx: 700), has captured headlines for much of the last month with reports of its steady layoff of hundreds of employees around China. In July, 55tuan, which earlier this year raised $200 million funding, also reportedly had to abandon plans for an overseas IPO after several major Western investment banks turned it down over concerns about accounting records for many of the companies it has acquired over the last year. (previous article) And to add to the mess, signs emerged last month that Chinese tax authorities were preparing to crack down on the unruly sector, which officials believe could owe more than 500 million yuan, or about $77 million, in unpaid taxes. (previous post)  With all these warning signs flashing, it’s not hard to imagine that the group buying sector is probably already in a state of crisis with a major shakeout likely to begin by the end of the year, which could easily see the closure of at least one or two big players.

Bottom line: The group buying sector, which has seen explosive growth over the last year, is the most likely candidate to lead the bursting of China’s current Internet bubble.

一个多月以来，我写了多篇关于中国互联网泡沫的文章，一家国内媒体的最新报导与我形成了呼应。这篇报导称，团购网可能在未来几个月互联网泡沫破裂时率先倒下。这篇报导称，国内团购网站2010年年底达到2000多家，到2011年7月，这个数字变成了5000家。此外，窝窝团高管估计，现在前十大团购网站全部亏损，这些团购网迅速烧掉了今年稍早筹集的数亿美元现金，争夺仍非常有限的中国网上购物者。这些购物者因为有那麽多网站可以选择，现在已经变得越来越挑剔，迫使网站提供价格便宜得很可笑的促销，明显是赔钱。全球最大团购网站Groupon和中国互联网公司腾讯合资组建的高朋网，在上月多数时间里都是媒体高度关注的对象，该网在中国持续裁员数百名。7月有报导称，窝窝网因遭到几家主要欧美国家投行的拒绝，放弃了赴海外上市的计划，投行为其去年收购的很多公司的会计记录感到担忧。窝窝网今年稍早刚筹资2亿美元。此外，上月有迹象表明中国税务机关准备对团购网行业严加管理，官方估计的欠税额为5亿元人民币，或相当于7700万美元。这些令人警醒的信号已经出现，不难想象团购网站行业可能已经陷入危机，年底时很可能开始发生重大变化，你可能轻易就能发现至少一两家行业龙头关门。

一句话：团购网去年经历了爆炸式增长，很可能在当前中国互联网泡沫破灭时应声而倒。

Related postings 相关文章:

◙ Tax Evasion Report: Trouble Brewing in Group Buying? 团购被曝逃税 行业整顿或在即

◙ Gaopeng, Kaixin Spotlight China Internet Turmoil 高朋网、开心网凸显中国互联网混乱现状

◙ 55tuan Scraps Listing Plan After Banks Get Cold Feet 各投行临阵退缩 “窝窝团”放弃赴美上市

Gaopeng Lay-Offs Auger Ad Spending Downturn 1高朋裁员预示网络广告支出或大幅下降

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There’s more negative buzz coming from Gaopeng, the group buying joint venture between Groupon and Tencent (HKEx: 700), which, when combined with other industry noise indicates a sharp downturn in online ad spending may be on the horizon. Just two weeks after reporting that Gaopeng had stopped advertising on Baidu (Nasdaq: BIDU) and Google (Nasdaq: GOOG) because they were too costly (previous post), Chinese media are reporting that Gaopeng has begun laying off staff to cut costs. (English article) The reports seem a bit fragmented and indicate a gradual lay offs began as early as April. But what does seem clear is that Gaopeng isn’t gaining nearly enough sales and revenue in China to justify the rapid build-up in its staffing and ad spending since its formation late last year. The latest Gaopeng developments echo similar recent buzz, with e-commerce executives saying competition has become incredibly fierce and unsustainable, and many players will be forced to cut back their advertising spending in the months ahead to keep from losing money. None of this should be surprising, since China now boasts at least three other big group-buying sites that have received major new funding this year (previous post), and the e-commerce space has also become a jungle in a very short time, with names like Wal-Mart (NYSE: WMT) joining a space that was already crowded with big homegrown names like Alibaba and 360Buy. (previous post) This kind of hyper-competition can hardly be comforting for companies that derive a big part of their revenue from advertising spending, most notably  Baidu, Sina (Nasdaq: SINA) and Sohu (Nasdaq: SOHU), whose sites are popular with advertisers. I would look for all three of these companies to report sharp slowdowns in revenue growth starting late this year, and some consolidation in both the e-commerce and group buying space, which could see Gaopeng close down as Groupon focuses on more promising growth markets.

Bottom line: Web firms that rely heavily on ad spending will see a sharp slowdown in revenue growth around the end of the year, as advertisers slash spending amid fierce competition.

美国团购网站Groupon和腾讯<0700.HK>合资的高朋团购再传出负面消息，结合业内其它消息来看，网络广告支出大幅下降或初露端倪。两周前有报导称高朋因费用太高已停止在百度<BIDU.O>和谷歌<GOOG.O>的广告投放。目前中国媒体报导称，高朋网已开始裁员，以削减成本。这些零散报导指出，高朋网早在4月就开始逐步裁员。但可以确定的是，高朋网自去年底成立以来，其在华销售和营收表现一般，与其雇员人数和广告支出的迅速增加不成正比。 业内近期出现类似情况，电子商务高管称，团购行业竞争白热化，发展变得不可持续，许多团购网未来几个月为避免亏损，将被迫削减广告支出。这些都并不令人惊讶，中国今年至少有三大团购网获得大规模融资，电子商务领域竞争也变得异常激烈，本土已有阿里巴巴和京东网等巨头，而沃尔玛也进军中国电子商务领域。这种激烈竞争让收入主要来自广告的公司很难感到欣喜，例如百度、新浪<SINA.O>和搜狐<SOHU.O>。我预计，今年底开始，这三家公司的收入增长将大幅下降，电子商务和团购网领域都将出现整合，由於Groupon关注更具增长潜力的市场，可能会关闭高朋网。

一句话：由於团购网和电子商务领域竞争激烈，广告商将大幅削减开支，严重依赖广告收入的网络公司营收增长将在年底大幅下降。

Related postings 相关文章:

◙ 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

◙ Groupon in China: Real Deal or Same Old Story?

◙ Wal-Mart Buys Into China E-Commerce 沃尔玛进军中国电子商务

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

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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。

Related postings 相关文章:

◙ 55tuan Scraps Listing Plan After Banks Get Cold Feet 各投行临阵退缩 “窝窝团”放弃赴美上市

◙ Baidu’s One-Dimensional Growth Story Continues 百度亮丽财报难掩前景不确定性

◙ China Groupon Wannabes in Fund-Raising Frenzy 中国团购网站掀起融资狂潮