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Real situation of group buying in China

 

James: For more on this new shopping craze in China, I turn to my colleague Wang Mangmang. Hello, Mangmang. Group buying websites only began flourishing in China a year ago. How far have they come?

MM: It started with the US website Groupon.com. Dozens of these websites have now sprung up in China trying to catch onto the trend. Buyers don't lose by driving a hard bargain in the world's hottest economy. And now, this new way of spending, or saving money, I should say, is still on the rise. There are more than 32-hundred group-buying websites in China. Last year alone, they generated more than 513 billion yuan in sales. That's about 78 billion US dollars. That is an increase of 97 percent from the previous year. These online services offer a variety of choices. From entity stores to coupons for restaurants, theaters, beauty salons, karaoke, as well as all sorts of training. You name it. But of course, the bigger attraction is saving money. Buyers can enjoy a discount of up to ninety percent off the market price. And that's something traditional online shopping cannot provide.

James: Bargaining is almost a way of life for these buyers. But along with group-buying comes trust and honesty. Right?

MM: That's absolutely true, James. There are a couple problems. First of all, there are cheating secrets. For example, sellers raise the price first and then give a big discount. Or, some websites play with the numbers. Say, the number shown on the webpage is two-thousand, where the actual number is only twenty. Tactics are one thing. But quality is another. Consumers want to make sure what they see is what they get. They don't want to see their washing machine stop working. But most group-buying websites are relatively small. And the quality of services and products can be very different. So naturally, there are complaints.

James: How bad is the situation?

MM: Since last January, group-buying-related fraud made up forty percent of all consumer complaints. Last year alone, there were more than two-thousand cases of dissatisfaction. And things are getting worse. The first three months of this year saw as many as 15-hundred complaints -- almost the same amount from all of last year. Even though there is increasingly strong supervision to regulate the market, there's still a lack of laws to reinforce the rules.

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