UPDATED 14:09 EDT / DECEMBER 16 2010

Group-Buying Upswing: a Great Deal for Users and Businesses

The group-buying format is becoming increasingly more popular. The attention towards the Groupon deal has brought a high level of interest for the group-buying model. The first significant mean of interest was Google’s acquisition, thought to be worth more than a few billion. The result?  A whole lot of attention for other group-deal services, shifts in business models matching Groupon’s, and a new way of engaging consumers.

Many companies have begun to follow the suit, even taking group-deals into specialized verticals, like mobile gaming. OpenFeint is an eloquent example for switching to group-deal, in order to sell its mobile games. Its first initiative during the new strategy is including a group-buying model which enables Game Channels developers to build games on the OpenFeint platform, promoting their games with daily or weekly deals.

The deals trend is spreading throughout the world rapidly, because of its winning solution for every party involvd: users and merchant partners.  A recent example of its viral aspect is a Vancouver deal site, which rewards loyalty and interest for a certain business. Delightdaily.com functions as standard, offering deals by email to the subscribers. The fastest subscribers get the chance of saving up to 50-70% of their ordinary consumption in a salon, local attraction or restaurant.

Although Groupon hasn’t been launched officially in China, the Asian internet users are quite enjoying the group buying, grace to the almost 1200 clone sites that have been used until now. The most popular search engine in China – Baidu recently released its own version of group buying platform – Youa Tuangou. Chinese are accustomed with the new buying trend and it is confirmed by statistics which accounted more than 10 million users since October 2010. The perspectives for China are encouraging, not to mention Geely’s intention (the new owner of Volvo) to have on sale on the online mall Taobao one if its car models.

Scott Silverman, regional director for Asia at Godfrey Q and Partners, based in Beijing and Singapore analyses the internet buying trend:

“Since most Asian countries are communitarian, the Groupon model seems to be built to suit and evolve in most of our markets.  Social networks with the just-in-time nature of mobile communications — opting in for deals to hit you at designated times, when you’re open for mobile-driven promotions [for products like] food, nightlife and consumer electronics.”

Giving the seasonal context of the buying effervescence, the group buying is expected to expand during the next period of time. Groupon, the largest deal site is taking nearly 80% of the U.S. shopping bargains on internet.


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