Post on 08-Apr-2018
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Group 2 : Kinshoo (40) |Adheeth(01) | Arisha(32) | Amrapali(34)
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H istory of group buying
Group Buying is based on a Chinese concept called Tuangou.
The popularity of the strategy in China is often attributed to the
Chinese tradition of bargaining for the purchase of goods of all types
Group buys can also be variation of Tuangou buying that also occursin China, in which an item must be bought in a minimum quantityor dollar amount, otherwise, the seller will not allow the purchase.
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W hat is group buying?
S everal people - sometimes friends, but possibly strangersconnected over the internet - agree to approach a vendor of aspecific product in order to haggle with the proprietor as a
group in order to get discounts. The entire group agrees topurchase the same item. The shoppers benefit by paying less,and the business benefits by selling multiple items at once.
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Group on-the mother of deals
Groupon is a deal-of-the-day websiteLaunched in November 2008, ChicagoThe idea was created by Andrew Mason
Groupon features a daily deal on the best stuff to do, see, eat,and buy in more than 300 markets and 35 countries.Groupon Origins Groupon grew out of a website called ThePoint, a website launched in November 2007 that lets you
start a campaign asking people to give money or dosomething as a group.
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Groupon is growing fast with a projected revenue of $500million for 2010. At just under 2-years old in April of 2010, thecompany was valued at $1.35 billion.
Groupon also owns several international operations,± the European-based MyCityDeal (17 May 2010)± the South American Clan Descuento (22 June 2010)± the Japanese service Qpod.jp Russian Darberry.r
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Group Buying Features
COLLECTIVE PURCH ASING POW ER:A group buys products at a lower price, which werepreviously available at higher price.
New price suits every individual & also fulfillsindividual needs.Benefits of bulk discounts.
Gives volume business to dealer too.W IN-W IN situation for both.Power of the group.
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The company serves one Groupon in each of the markets it serves.If a certain number of people sign up for thatoffer, then the deal becomes available to all.If the predetermined number is not met, noone gets the deal that day.
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CUSTOMERSIGNS UP @DEAL SITE
DEAL REACH ESCRITICAL MASS
CUSTOMERSPAY DEAL SITE
DEAL SITEFEATURES DEAL
CUSTOMERREDEEMS COUPON
@ MERCH ANTDEAL SITE PAYS
MERCH ANTSH ARE
MERCH ANT SIGNSUP @ DEAL SITE
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Deep DiscountsDiscover services/merchandise that they didn t
know of Access to new services/merchandiseSmaller side deals in addition to the main deal
Deal personalization based on voluntarydisclosure of preferencesDeals divided up by ZIP code
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Early Adopters: H ighly affluent with disposableincome
Urban Females18-34 yearsLikely FACEBOOK & TW ITTER users
60k-200k users/city100-1000 deals/users/city
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H igh fixed businessH igh customer acquisition costBusiness thriving on repeat customers
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24-hour periodThe viral nature of this promotion means that sales
can be on the order of hundreds to thousands of orders in a single day.Revenue: Retains ~50% of deal minus credit cardfees
Redemption Rate: ~80%Incremental Spending: Gap expectation thatcustomers will spend more once in storeRepeat customers: 22% repeat business
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Contd..Business owner makes only 25% profit.W illing to take short-term loss because:
Cash flow boost.Not everyone will redeem their voucher.Inexpensive, effective advertising.New customers & Return customers.
What s i n it f or the c oll ective b uy ing sites? Groupbuying sites typically take a 50% cut on each voucherthat is sold.
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SIDE DEALS
LEARNING CURVE
TOO MANY DISCOUNTS
REDEMPTION OVERCOUPONLIFE TIME
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Taobao s Amazing Deal
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Ta o ba o. c om , a Chinese group buying website made history by selling 205 M e rcedes-Be nzsmart cars in 3.5 hours in October 2010.
Or igin a l pr ice o f ca r: RMB 176,000Taobao offered a 23% discount for group purchase (RMB 40,000 discount on original price )D own Pa ym e n t : RMB 1,000
The first car was sold after 24 seconds, 55 cars were sold after six minutes and 205 cars weregone after three and a half hours.
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Indian Group Buying Sites
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Founder and Team : Anisha Singh
Funding Source: PE firm CX Partners + US investorsW hen Launched: 2009W ebsite Ranking: 17,989Employees: 34 employees
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Founder and Team : Kunal Singla and KanishkShukla
Funding Source: SE LF-FUNDED (about Rs 10 lakh)W hen Launched: 2009W ebsite Ranking: 18982Employees: 12 employees
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Founder and Team : Guneet Singh and H arish BahlFunding Source: Group Buying Global AGW hen Launched: 2009W ebsite Ranking: 7506
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Founder and Team : Satish MadhiraFunding Source: Self-funded (Rs 10 crore) + AngelW hen Launched: 2010W ebsite Ranking: 23978
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Founder and Team : John Kuruvilla, Ujjwal Tickooand Tej AroraFunding Source: US investorsW hen Launched: 2010W ebsite Ranking: 32073Employees: 20+
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Founder and Team : JasperFunding Source: Self-funded and from INDO US
venturesW hen Launched: 2010W ebsite Ranking: 1008Employees: 230+ employees
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THE BUYIN G PR OCESS
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CouponsIVRTelephonic
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BA CKEND OF A CLON E
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The BiG Mommy has Entered India
Groupon has Bought Sosasta.com and hasentered india as Groupon India Pvt Ltd.
The value of the deal is not knownIt s more of a talen acquisition rather thatcustomer base
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Many more Players
It s easy to start a clone siteZapak and many more players to venture into
Expect TOI, IBNLIVE, NDTV etc to feature adeals section soonH ow many will survive??
Big money!!!
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Thank You