The Latest China Group Buying reports indicate that total transaction value in July and August reached CNY3.03bn and CNY3.69bn respectively (up 56.2% in July and 74.9% YoY in August vs +56.4% in June), creating another new high in terms YoY growth in August, last seen in January. The number of vouchers sold in August increased by 47% YoY, compared to 15% YoY growth in the same month last year. Transaction growth in the first two months of 2H13 was driven by an increase in both the number of purchasers and average deal price.
The number of group deal buyers had been somewhat stagnant since it first reached 45 million in November 2011. Yet beginning from 2013, the number of purchasers has been recovering from a monthly average of 38 million in 2012 to a new high of almost 60 million in August. We attribute the growth to an increase in repeat customers, on top of the effects of further mobile penetration, and the impact of a further advance by the group-buy players into lower tier cities. This growth in the number of purchasers has occurred while average deal price has also increased steadily. The rise in both the price and the number of purchasers leads us to believe that group-buying players’ strategy in providing higher price products with better service.