Group buying ends: How does Hongtu Sanbao “blend” Lashou?

After a long wait, the second shoe finally dropped. It was both expected and surprising. Lashou, the group-buying "survivor" that has been silent until now, finally made a sound.

According to public information on October 19, Hongtu Sanbao, which owns 3C and department stores, signed a contract to acquire Lashou.com, but neither party disclosed the purchase price. This gloom is in sharp contrast to the hustle and bustle of the group buying "Three Kingdoms Kill".

Since the beginning of this year, the construction of city sub-stations of the top three group buying platforms, Meituan, Dianping, and Baidu Nuomi, has been in full swing, and marketing activities have been launched one after another. "The advertising columns of Guangzhou University have been filled with Meituan and Dianping, and there is no place for us to post." said a marketing manager of an app that makes investment products for college students. However, no matter how popular it is, the group buying business has become a tool for these companies, not the ultimate goal.

As the top three companies take up more market share, the other two group-buying companies, Wowotuan and Lashou, are being further eroded. Wowotuan Chairman Xu Maodong made additional investments and held a press conference last month to announce Wowotuan's transformation into Internet marketing, customizing independent apps and other products for merchants.

As the last shoe to fall, Lashou, with its current status as a traditional company, Hongtu Sanbao, announced the complete arrival of the end season of the group buying industry. But what is even more puzzling is what tricks can Hongtu Sanbao and Lashou "mix"?

Group buying season ends

All good things must come to an end, but the group buying party ended a little too quickly. The smoke of the battle between hundreds and thousands of groups has just dissipated, and the "survivors" have not yet enjoyed the joy, but have been dragged into a new round of O2O competition.

As we all know, Meituan and Dianping are fighting to become the O2O platform for local life services. From strategy to marketing, from first-tier and second-tier cities to third-tier and fourth-tier cities, the two sides have launched a hand-to-hand battle to fight for every inch of land.

The current situation is that Dianping, based on the platform prototype it has already built, is striving for breakthroughs at the tool level. For example, it has penetrated into first- and second-tier merchants through various food delivery, reservation and even CRM management products, and has deepened its presence in third- and fourth-tier cities through group buying.

Meituan is also working to get rid of group buying. On the one hand, it is maintaining its existing advantages in third- and fourth-tier cities and conducting strategic defense against Dianping.com. On the other hand, it is adding products such as Maoyan Movies and Meituan Hotels to deepen its efforts in segmented industries.

According to data from Tuan800, the top three companies in terms of market transaction volume in August this year have accounted for 89% of the transaction share. The market share of WoWo, Lashou and Manzuo has been rapidly eroded.

This year, WoWotuan Chairman Xu Maodong increased investment by US$50 million through personal capital increase and external capital injection, trying to make one more effort in the closing era.

Soon after, 55tuan held a press conference to announce its new development direction, intending to use the merchant resources it had accumulated to develop mobile network promotion, develop customized apps for merchants, and do some related mobile promotion. On September 2, Xu Maodong told the media that 55tuan had already transformed, and currently 50% of its revenue came from service fees from e-commerce platforms, while group buying business revenue accounted for only 10%.

Lashou found another lifeline in the downturn. It was acquired by Hongtu Sanbao, a traditional 3C product channel provider that was also in trouble but trying to save itself. However, can banding together to keep warm help you withstand the cold winter? Perhaps it is more of a one-sided fantasy.

How does Hongtu Sanbao “blend” Lashou?

What do Hongtu Sanbao and Lashou want to do after their merger? O2O, definitely O2O.

Under the general trend of e-commerce, Hongtu Sanbao is having a hard time. In terms of 3C products alone, JD.com and Tmall occupy the majority of online stores, while offline stores such as Suning and Gome are also shrinking.

In an internal email of Hongtu Sanbao, it is mentioned that the strategy department led by Zhou Feng, chairman of Hongtu Sanbao, will lead the design of a new O2O business model and make full use of Sanbao Group's resources to expand the group buying business. Sanbao Group currently has 3,000 offline stores for mobile phones, computers, department stores and other products, with nearly 80,000 employees worldwide. These offline advantageous resources will help Lashou.com provide better group buying and local life services.

It describes a beautiful vision, but the picture is so beautiful that I can't bear to look at it directly.

In fact, the combination of Hongtu Sanbao and Lashou has a ready-made template, Suning and Manzuo. Hongtu Sanbao and Suning have the same need for e-commerce, but Suning has taken a more radical path, with Chairman Sun Weimin leading the e-commerce. Although every step of the reform is painful, at least it is still moving forward.

The person in charge of Gome's e-commerce was left speechless by the traditional executives' remarks: "You invest so much money every year, but your sales are barely a fraction of ours. How can you be considered an advanced productive force?" With the constant replacement of senior executives, Gome's e-commerce development is actually in a semi-stagnant state.

After Manzuo joined Suning, its sales performance has not changed at all. The group buying sales in August announced by Tuan800 showed that Manzuo's monthly transaction volume was 30.81 million, which is the transaction volume of one of Meituan's better second- and third-tier cities.

What is left of Lashou.com now? According to the descriptions of several front-line managers I know, Lashou has definitely been completely defeated in first- and second-tier cities, and its mobile transformation has not kept up. Some employees of branch offices in cities that did not perform well have either been disbanded or are waiting to see if they can get some compensation. A small number of low-tier cities that were established earlier can still maintain a balance between income and expenditure, but the number is very limited.

The combination of Hongtu Sanbao and Lashou using e-commerce or O2O dimensions is actually more of an imagination than a reality. Short-term activities can activate group buying users, but after the stimulation of the activities, the users will still disappear, because this year Meituan, Dianping, and Baidu Nuomi's activities basically have no gaps.

A group-buying website without the excitement of activities is nothing more than a sinking ship. Hongtu Sanbao's rescue measures are nothing more than shaking the big ship to slow down its sinking, which will not change the outcome.

It is even more impossible for Hongtu Sanbao to use group buying websites to complete its own e-commerce transformation. Hongtu Sanbao cannot avoid the problems encountered by Suning's e-commerce transformation. Employees in traditional industries who work eight hours a day are unwilling to extend their working hours to twelve hours a day even if their wages double. And physical strength and service are precisely the basis for the survival of e-commerce.

If there is any benefit to be gained from the combination of Hongtu Sanbao and Lashou, it is that the previous investors, Maiton Investment and Jinshajiang Venture Capital, suffered some losses but at least did not lose everything. The person in charge of the $100 million financing before Lashou's IPO resigned when Lashou's IPO failed.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.