More than 700 group-buying websites have shut down on the mainland in the past two months.
A recent report by tuan800.com, which specialises in group-buying website navigation, said more than 300 closed in August, while statistics from another group-buying aggregator, lingtuan.com, showed another 419 went out of business last month.
It said 5,700 group-buying websites had emerged between March last year, when the mainland's first such website was established, and the end of last month. More than 1,000, mostly small ones, have folded, it said.
The sector's woes go some way towards fulfilling a gloomy prediction made by an information technology veteran a year ago, when many mainland copycats of the US online shopping website Groupon began to emerge. Former Google executive Lee Kai-fu warned that '99 per cent of group-buying websites are going to die within one year'.
Chen Shousong, an analyst at Beijing-based consulting company Analysys International, said the series of recent closures was partly a result of a dearth of client resources. 'Major clients have already been carved up, so there are few opportunities for those who join in later,' he said.
Poor management and lack of investment had also contributed to their closure, he said. 'Most of these start-ups die if they fail to attract venture capital or other investors, since they usually don't have enough money for expansion,' he said.