Group Buying Sites

8/7/2019 Group Buying Sites

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Group 2 : Kinshoo (40) |Adheeth(01) | Arisha(32) | Amrapali(34)



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.



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.



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.



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



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.



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.



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



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



Early Adopters: H ighly affluent with disposableincome

Urban Females18-34 yearsLikely FACEBOOK & TW ITTER users

60k-200k users/city100-1000 deals/users/city



H igh fixed businessH igh customer acquisition costBusiness thriving on repeat customers



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



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.



SIDE DEALS

LEARNING CURVE

TOO MANY DISCOUNTS

REDEMPTION OVERCOUPONLIFE TIME



Taobao s Amazing Deal



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.



Indian Group Buying Sites



Founder and Team : Anisha Singh

Funding Source: PE firm CX Partners + US investorsW hen Launched: 2009W ebsite Ranking: 17,989Employees: 34 employees



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



Founder and Team : Guneet Singh and H arish BahlFunding Source: Group Buying Global AGW hen Launched: 2009W ebsite Ranking: 7506



Founder and Team : Satish MadhiraFunding Source: Self-funded (Rs 10 crore) + AngelW hen Launched: 2010W ebsite Ranking: 23978



Founder and Team : John Kuruvilla, Ujjwal Tickooand Tej AroraFunding Source: US investorsW hen Launched: 2010W ebsite Ranking: 32073Employees: 20+



Founder and Team : JasperFunding Source: Self-funded and from INDO US

venturesW hen Launched: 2010W ebsite Ranking: 1008Employees: 230+ employees



THE BUYIN G PR OCESS



CouponsIVRTelephonic



BA CKEND OF A CLON E



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



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!!!



Thank You

Group Buying Sites

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