Being the first one of its kind to come into China’s market, Gaopeng, the Chinese subsidiary of Groupon, has been going through tough times with scandal over lottery cheating and a succession of layoffs. But that doesn’t scare or stop people who are outside and want to tap into the promising market to get a chunk.
That said, San Jose-based Special Deals is opening its operation in China soon, but with some innovations to differentiate itself from Lashou, Meituan and Nuomi, all are aggressive and fierce local competitors, and to avoid all the pitfalls that Gaopeng has fell into.
Co-founded by serial entrepreneur Bruce Chen who used to be one of the founding members of SinaNet (later became Sina through the merger with China’s SRSnet) and later on founded his own startup which was acquired by eBay, Special Deals offers its customers with something different compared to Groupon and Living Social. For regular daily deals services, you need to pay the whole sum to get a meal or movie tickets or something, whereas on specialdeals.com, you only need to pay one tenth of the sum as deposit to make a deal, and then pay the rest when you get to the local merchants. The business model is different from what we commonly see on daily deal sites.
Focusing on quality, not numbers
Its Chinese subsidiary Yikuair takes the same approach with something patently new out there.
Buying deals on Yikuair is different from other Chinese group buying sites, you only need to pay the deposit beforehand, and then when you get to the restaurant or something you can pay for the remaining fee.
And its Chinese name Yikuair was a play on words with double meanings. It can be related to “together” which speaks to group buying behaviors, while also means “RMB 1 yuan”, which will be the price(deposit only) for lots of its deals, according to Bruce.
Next up, you can share your deals on Sina Weibo and pay your money using Weibo virtual currency. By sharing on Weibo, your friends and followers get to know what you buy recently, don’t underestimate the power of word-of-mouth.
The other different thing, is the quality of deals. If you flip through most of the Chinese group buying sites, you may find most of them highlight all types of different numbers related to a deal: original price, discounted price, savings, how many people purchased, remaining time, these numbers stir people to charge their credit cards, and no one cares about the quality of every deals. And that’s one reason why there’re so many complaints over group buying services. According to Tuan800, a daily deals aggregator who also conducts group buying market research reports based on its own dataset, from last December to this May, the aggregator saw an average of 645 complaints monthly with a month-over-month increase of 34.53%. People are not satisfied with what they got.
To address that problem, Yikuair will only offer its customers with carefully selected quality deals, mostly international brands.
Weibo-based Micro Marketplace For Local Business
Except for group buying service, Yikuair is releasing a help-yourself marketplace based on Sina Weibo, the popular SNS in China that let people post, repost messages in no more than 140 characters. As of this April, the microblogging services claims a whopping number of over 140 million users and the number is expected to cross 200 million by year end. That is a huge user base that can be leveraged for decent outcomes.
Being the first weibo-based marketplace can give the service some unprecedented edges over its peers including (a) have access to a huge user base (b) no need to cultivate its own pool of users before get started, they’re already there, actively.
According to Ady Chen, VP of speicaldeals, In the future, everyone gets to post their own deals on the to-be-launched serivice, they can setup a limited number for how many deals they want to make, add in some descriptions, then wait for customers. The good thing of this is, not every local business is eligible to be featured on Meituan or Lashou, there’re still tons of local businesses or craftsmen need a channel to promote themselves and get exposure to reach its prospective customers. The micro marketplace by Yikuair is there for them. The vision is big considering the amounts of local businesses in China, so does the market size and potential.