Integrity is the main problem for group-buying websites at present, experts said Sunday, but a new credit certification system for the sector will help boost its development.
The first batch of seven group-buying websites - including meituan.com, lashou.com, 24quan and jumei.com - received credit certificates yesterday. Group buying offers convenience and has big potential to expand domestically, but there is a wide variety in terms of the quality of companies currently operating in the sector, said Wen Zaixing, deputy director of the market supervision department of the Ministry of Commerce, at an meeting for the industry held yesterday.
Problems in the industry include false advertising and sales of fake or inferior quality goods, and these are partly due to easy market access and the lack of a proper system of supervision.
One way to address the problem, said Wen, is the credit certification system for the sector launched in late July by the Credit Rating and Certification Center under the Ministry of Commerce and China Guidance Center of Group Purchase Development (CGPGC) under China Electronic Commerce Association.
After the first seven firms, others in the industry can submit documents to apply for a certificate as well, said Wen.
The sector is expected to see further growth in 2012, with the gap between the bigger and smaller companies likely to widen further, Song Yanming, deputy director of the CGPGC, said yesterday.
"The credit certification system can place certain constraints on group-buying websites and promote development of the sector," Feng Lin, an analyst at Hangzhou-based China e-Business Research Center, told the Global Times yesterday, although he said that the system is not sufficiently binding.
"Also, integrity is not the only problem. People have begun to have doubts about the sustainability of the industry," said Feng.
The sector is currently capital-driven as few firms have yet started to make a profit, and financing has been more tight since September, which means an industrial reshuffle is likely, said Feng.