Since couple days ago there have been news broke that 24Quan, a Chinese group buying service was cutting down local branches due to money shortage. The Beijing-based company was reportedly closing underperforming sites in tier-3 cities and downsizing sales team on top of salary cut/restructure.
While according to Aaron Du, founder and CEO of the Beijing-based company, all the branches and staff cuts could be ascribed to its ongoing HR and sales coverage restructure in an effort to improve their bottom line and to be the first profit-making Chinese group buying service by year-end. As for the merchants dispute, Aaron explained the facts that 24Quan is losing in some remote cities was leveraged to undermine its trust with their local merchants. However, “All merchant inquires have been resolved, and we’re opening a merchant hotline to resolve any future merchant payment inquiries” he added.
After two rounds of angel investments of undisclosed sum in September 2009 and May 2010, 24Quan raised US$ tens of millions in Series A (Febr 2011) and Series B (July 2011). Also a Sina Weibo post claims that the company is raising Series C of US$ 30 million from Dinghui Investment.
The future picture for China’s group buying apprentices is getting gloomy after the heat in late last year and early this year. Lashou’s unsuccessful IPO trial casted concerns over the daily deal markets. According to Tuan800, a daily deals aggregator and group buying market researcher, as of this October there’re 4057 group buying sites in China.