The Research Of Business Model About The Group-buying Websites In China

Since the first local group-buying website (GBW) established on March2003GBWs had been growing rapidly, the amount of GBW had increased up to more than5,000in China. However, nearly a quarter of these websites closed soon after theirestablishment. When the competition among those GWBs getting more and morefierce day by day, how to survive and develop has become the main problem for manyexisting websites. Therefore, to research on the business model of GBW is importantfor the strategic adjustment of the group-buying websites.This research is based on foreign and domestic relevant research achievement,selected36typical GBWs for researching. Analyzed the internal resources,capabilities, SOU (Strategic Operational Units). Then, by using data analysis methods,the mechanism of the internal operations of business model has been explored. Theconclusions are as follows:(1) Economies of scale system. That means the economies of scale system existsbetween cost of capital attraction and product quality in capital attractionSOU.(2) Diminishing marginal returns. The GBW’s total revenue will decreasingwhile products’ quality increasing in schedule sales SOU.(3) Competitive effect and the Matthew effect. The GBW flow rate shows alsopositive and negative effect in popularizing SOU.In the end, this thesis proposed a suggestion for GBW’s development from twoaspects which is based on the fierce competition environment they are facing:investment decision making based on current business model and the reform ofbusiness model. And the paths of the business model reform includes optimize capitalattraction SOU, schedule sales SOU; intensify the relationship between upstream anddownstream enterprises and related corporation of SOU.The paper contains6parts: part I, introduction, mainly about the background ofthis paper, innovation points and content of this research, etc., part II is the review ofbusiness model theories and shows the industrial characteristics of GBW, the thirdpart introduces the methods and apply of SOU business model. Then in part IV,analyzed the resources, capability, SOU of varies websites and also build up thebusiness model of group-buying website. In section V, it analyzed the internal operation system of GBW’s business model and proposed suggestions for strategyadjustment. And in final part, it proposed suggestions for GBW’s development.