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Suning Commerce (SZ:002024) announced that it fully acquired group-buying site Manzuo for nearly $10 million (source in Chinese), continuing its expansion into Internet industry after becoming the largest shareholder of peer-to-peer video streaming service PPTV last year.

In addition to maintaining independent operation, Manzuo will also take over the group-buying and travelling businesses under Suning. Feng Xiaohai, founder of Manzuo, will be named as the head of Suning’s local life sector. The acquisition procedure will be completed by the end of this March.

The market valuation of Manzuo is much lower than Nuomi’s $300 million. Group-buying has become a money-burning business after initial booming development and few have survived the sluggish market. KPCB, an early-stage investor of Manzuo, exists after the acquisition. The number of domestic group-buying sites shrank to 213 from 281 in September last year, according to research report released by group-purchasing navigation website Tuan800.com.

Despite the reduction group-buying sites, the turnover of China’ group-buying industry rocketed 67.7% year-over-year to 35.88 billion yuan ($5.94 billion) in 2013, with customer number hitting 71.23 million as of Dec. 2013, according to the same report. These figures demonstrate a more centralized trend in the industry, with the turnover of top-five group-buying services (Dianping, Meituan, Nuomi, 55tuan, Lashou) amounted to 33.81 billion yuan, accounting for 95.7% of the total market.

Most of the leading group-buying sites are venture backed by deep-pocketed Internet giants. Baidu just acquired the remaining stakes in Nuomi. Meituan and Gaopeng are backed by Alibaba and Tencent, respectively.

In the past few years, Suning tried to establish online presence with a special focus on local life. It launched a local life channel last June and released Suning Life, an LBS-based mobile app for local cuisines and group-purchasing services, at the beginning of this year. Manzuo, which has abundant offline merchant resources, may help Suning to accelerate its exploration of local life market.

image credit: Manzuo