Online Spending at Deal-of-the-Day Websites in China Skyrockets

Turnover from deal-of-the-day websites in China grew at a meteoric pace of 550% in 2011 to RMB 11 billion ($1.74 billion USD) according to recent statements from, a website which collects group-buy offers in China. News of this surge came just days after it was reported that turnover from Chinese deal-of-the-day websites had grown 20% month on month to RMB 1.45 billion ($229.4 million USD) during last November alone.

Although online group buying (or tuangou in Chinese) has been around for roughly half a decade in China, in recent years – even before what many saw as the troubled entry of group-buy giant Groupon into the Chinese market through its joint venture with Tencent – the number of deal-of-the-day websites in China has exploded. As of last year, it is estimated that there are anywhere between several hundred to several thousand such sites currently operating in China; although today the majority of Chinese group-buying  marketshare is enjoyed by, and

Beyond the recent financial successes of China’s group-buying websites, the e-commerce industry as a whole has witnessed enormous growth in the country during the past year and is poised to play an increasingly more important role in retail and consumer spending in the years to come. In Shanghai alone, the annual value of e-commerce transactions is expected to reach RMB 1.2 trillion ($189 billion USD), including RMB 100 billion ($15.8 billion USD) in online shopping receipts, by the end of 2015. To put these projections into context, Chinese retail spending as a whole stood at RMB 16.35 trillion ($2.58 trillion) in the first 11 months of 2011 according to China’s National Bureau of Statistics.

While most analysts agree that rising growth in wages continues to be the engine driving increased consumer activity in general, the e-commerce industry has undoubtedly been bolstered by the sheer size of China’s netizen population and the enormous popularity of online shopping. In total, an average of 6% of Chinese 505 million internet users buy goods online everyday, and 33% do so at least once a week, well above the average rates on 1% and 5% respectively seen in Europe. With China’s online population set to reach 700 million by 2016, the value of online transactions of all kinds undoubtedly has several years of strong growth ahead of it.