Research On The Development Strategy Of’Hand-in-Hand’ Group-buying (B2T) Website

In the beginning of2010, Groupon, a group buying concept, broke into China’s market, and quickly gained recognition with less pre-investment, quick cash flow, huge discount and large consumption potential. More suppliers were joined in so that the employees involving group buying business were increased rapidly. Hand in Hand Group Buying Website,(hereafter abbreviated as Hand in Hand), entered into the competition in September2010. Hand in Hand is owned by Jinan Hand in Hand Internet Technology Co., Ltd. It focuses on building up the No.1group buying brand in Shandong. Just after established, Hand in Hand launched three websites for Jinan, Qingdao and Yantai. Up to2010, Hand in Hand already owns more than30,000members and more than50affiliated suppliers.Since group buying websites are coming fiercely, there becomes a closely competition with thousands of group buying websites in a short period, which, obviously will lead to a derail growth. Giant group buying websites, such as Lashou.com, crazily encourage adventure investments, form up brands and insist on low price strategy with low profit even pay out to help supplier promote themselves. However, because of the fund shortage, those small sized websites devote to survive but until March,2011, more local group buying websites in Jinan were given up with the fund shortage. Within this environment, Hand in Hand also faces to more difficulties.This essay applies PEST, SWOT, and Porter’s Five Forces model with the development of Hand in hand and discovered that group buying concept has a bright future. But Hand in Hand also has some problems including less confidential from suppliers and consumers because of the fraud websites, less capital strength, weak reputation and the fund shortage. So the author concludes that Hand in Hand should have to confront to difficulties with low cost operating, effective marketing and branding. Firstly it should reduce the management cost by constricting current websites, reducing employees, optimizing the assessment system; secondly it should reduce the operating cost to achieve low cost operating by resource exchange, optimizing technical programs and the complete promotions. Then Hand in Hand should also establish the marketing development strategies that suit for itself to gain more market recognition on three aspects including product, price and promotion. At last, in order to face to the credit crisis during the group buying development, Hand in Hand should also build up the brand image by introducing a corporation identification system; and improve the corporation good will and reputation by pursuing multiple distribution promotions and supplying better after-sale services to both suppliers and consumers.While the road has twists and turns, the prospects are bright. After tune up the development strategies, definitely Hand in Hand would be able to survive in the tough situation and recover soon after.