In the case of 24Quan, Du said his company expects to become profitable next month. "We are not seeing a lot of companies that can say that," he said, noting that 24Quan has become an important tool to help merchants market their brand.

Groupon has also entered China's group buying market, with a joint venture called GaoPeng.com that has grown in popularity. But in August the company's China business began hundreds of employees, sparking criticism that GaoPeng had been mismanaged. GaoPeng posted a of US$46.4 million for the past nine months, generating only $2.1 million in revenue, according to a regulatory filing by the company.

Du said a major concern is that one of China's top leading group buying sites will eventually implode, causing local merchants to draw back from partnering with such services. "There's a very realistic risk," Du said. "If they implode, a lot of vendors will be very frustrated."