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The largest Social Buying Site is Not About to Take a Breather!

GROUP BUYING, also known as collective buying, offers products and services at significantly reduced prices on the condition that a minimum number of buyers would make the purchase.OMD Deal 1

In recent times group buying websites have emerged as a major player in online shopping business. Typically, websites featuring a “deal of the day”, with the deal kicking in once a set number of people agree to buy the product or service.

Shops, restaurants and other retailers that partner with these discount websites have to take hefty price cuts, but it means they have instant access to a whole new group of customers.

The online group buying market is fragmented among hundreds of smaller players worldwide. The model has little barriers to entry and has gained attention from shoppers and businesses alike globally.

The current fastest growing group buying site – Groupon recorded 626,000 unique visitors in May 2012. Recognized as the largest social buying site in the world, Groupon is an iconic representation of group buying, offering online deals that feature daily promotions.

Strong competition from its competitors Dealmates, LivingSocial, Everyday & Mydeal, in terms of no. of unique visitors, come short by more than 100% less than market leader Groupon. Since May 2011, Groupon is the only site rising among its competitors with a stable increase of unique visitors.

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Prominent competitors such as Dealmates and Mydeal showed a sustaining level of unique visitors at 248,000 and 234,000 respectively. These two sites generally offer similar, if not the same offers across to users, however both come short when it comes to variety as Groupon deal offers vary beyond shopping with hotel offers, travel packages, spa & wellness, learning and services.

With Groupon offering more variety, they have the advantage of offering more join promos and co-branding such as a spa deal with facial care products or a travel package with hotel and air travel.

However, Groupon comes with the disadvantage of being too cluttered compared to other sites.

There are many advertisers offering the same deals and random odd deals such as pest control or the sale of a cardboard t-shirt folder making the site too cluttered for some consumers which might risk drop-off.

The similar factor of group buying sites is the demographics of their visitors. In terms of user profile, they’re very popular among females especially those aged 25 and above. The bargaining and pricing factor, and deals offered are generally skewed to appeal more to females such as spa packages, shopping items, beauty offers etc.

The group buying trend seems to be more active in central region which mostly concentrates around Klang Valley. This is probably due to deals offered are mostly in Klang Valley and Northern region (Penang).

This can allow advertisers to target more female skewed audience in urban areas which can be very cost efficient.

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