The appetite for discounted shopping and dining in China isn’t showing any signs of waning, with Chinese daily deal sites posting more than 10.3 billion yuan ($1.7 billion) worth of revenue in the first quarter of 2013. This figure is up slightly from the 10 billion yuan hit in the fourth quarter of 2012.

Although revenue in the first quarter showed barely any increase over the previous quarter, it was likely because people bought less during the Chinese New Year holiday, according to a research report released by Dataotuan (via Tech in Asia).

Leading market players in the industry continued to consolidate, with the top 10 sites taking up 94.7% of the market share, just a tad down from 95.3% in the fourth quarter of 2012.

Juhuasuan, a daily deals site run under the Taobao brand by China’s leading ecommerce company Alibaba Group, kept its leadership position in the market, while rival Meituan clung on solidly to its second overall position, as can be seen in the chart below.

Graph1 730x403 China daily deals market booked $1.7 billion revenue in Q1 2013, as Juhuasuan maintained top spot

However, Juhuasuan’s market share declined to 33.6% from 47.8% in the previous quarter, while Meituan saw its market share increase to 17.8% from 13.1%.

Dataotuan CEO Wenli Liao said Juhuasuan’s market share decline this quarter was because it had generated a lot more revenue in the previous quarter during the big 11.11 shopping festival held on November 11 to celebrate Single People’s Day, where the Taobao group generated a historical daily revenue of 19.1 billion yuan. Many merchants also promoted their online shopping deals on December 12 2012.

These reasons also saw the proportion of Juhuasuan product deals revenue decline to 62.7% from 88.1%.

Graph2 730x389 China daily deals market booked $1.7 billion revenue in Q1 2013, as Juhuasuan maintained top spot

On the other hand, Meituan’s proportion of local services deals climbed to 29.8% from 24.7%. The average price of a service deal was 179.7 yuan ($29.34), discounted by 57%.

Graph31 730x361 China daily deals market booked $1.7 billion revenue in Q1 2013, as Juhuasuan maintained top spot

The top five sites – Juhuasuan, Meituan, Dianping, Lashou and 55tuan – saw their combined market share decline to 77.3% from 82%, as Dataotuan noted that changes were likely happening among the third- to sixth-ranked websites.

Dining was still the most popular category in the first quarter of the year, accounting for 35.7% of the daily deal sites market.

Juhuasuan last month launched an overseas platform to cater to Hong Kong and Taiwan consumers, as the site and its owner Alibaba will be looking for growth in part, to stave off any future competition from Groupon.

The company has made moves to strengthen its position in China through a different daily deals website, called Gaopeng, the result of a joint-venture with Tencent. According to Dataotuan, the “New Gaopeng” – a merger of Gaopeng, Ftuan and QQtuan – “is not yet making a dent with 2.7% market share.” The data show that Gaopeng chalked up 2.7% of market share, up from 1.8% in the previous quarter.

Headline image via Thinkstock