China saw a veritable explosion in Groupon clones over the past couple years, but many of them have disappeared as quickly as they appeared. A few of them have emerged as the market leaders, and 55tuan.com claims to be the first to turn an actual profit, as noted by Technode.
CEO Xu Maodong says the company brought in a profit of millions of RMB this month, as of December 25. 55tuan, which operates in 130 cities and has roughly 10,000 merchant partners, isn’t the first to make the claim, though, as rival Manzuo asserted that it made a 1 RMB profit in September. I’m sorry, but I’m highly skeptical about that figure.
Several other daily deal sites, including Lashou and Meituan, had aimed to be profitable by the end of 2012. Some had even begun the paperwork for an IPO filing in the US before backing out as the highly speculative industry turned rocky.
At its height, the Chinese group-buying industry was believed to have over 6,000 entrants. Thousands of those have since closed up shop. Hundreds, if not thousands, are still business, but the market has continued to consolidate into only a few key players.
Groupon itself tried to make a play for China, but it had trouble competing with the cutthroat margins set by its domestic clones. It ended up merging with rival FTuan, which was backed by its local partner Tencent.
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Related: Group buying is huge in China, now reaching 42 million shoppers
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