Dianping is both a group-buying site and the creator of Shaanhui, a new marketing model that offers discounts to diners. (Photo : Reuters)
Group-buying sites that offer coupons on purchases may be on the way out in China due to an increasing number of complaints and the rising popularity of a new marketing tool, according to a report by Guangzhou Daily.
Consumer complaints have been mostly harping about false advertising, such as food items and products that do not match the descriptions or photos found on the websites.
Diners have also complained about some vendors imposing strict requirements that make it difficult for them to redeem coupons and take advantage of deals.
A man surnamed Wang said that he was never able to secure a table at a hot pot restaurant and use his coupon. In the end, he had to refund the coupon at the website.
According to a coffee-shop owner, vendors sometimes have to reduce the size of their offering because of the competition in the group-buying sector, forcing heavy discounts.
Some vendors have also reportedly used altered photos to advertise their products and services, which has created a negative image of group-buying.
Group-buying websites have a reputation for not performing proper screening of the vendors that use their site. Vendors can also buy user comments from third-party service providers.
According to Zhang Tao, CEO of Dianping, a review site and group-buying business, deals and coupons only generate short-term customer traffic without building a loyal customer base. The increased sales come at the cost of heavy discounts and a 5-10 percent commission paid to the sites.
In April, Dianping launched a new Shaanhui feature, wherein users could enjoy discounts when paying for food and beverages using Dianping's mobile app. The company said that this may be a replacement for the group-buying model.
Super Star Group, a restaurant chain, introduced the Shaanhui feature in its 31 outlets. It has reportedly generated sales that have surpassed the group-buying model.
