I wrote this article in 2011 at SharingBlogIdeas.com (my another domain) and finally recovered it from waybackmachine (archive.org). Currently SharingBlogIdeas.com is used by my nephew Karthik to share his random thoughts, ideas, etc.
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.
To learn more about Group Buying, See “Business Today Story on Group Buying Portals in India”:
Nice article from Pluggd.in: “The Super Duper List of Groupon Clones in India [28 and counting]”:
How existing Group Buying Sites in India PUSH THE DEALS to consumers works ??
- Group Buying Sites are tied up with Brands or Sellers.
- Deal Negotiation: Offer products/services at discounted price in your city on Dining, Travel, Entertainment, Movies, Spa, Healthcare services and lot more…
- Deal condition: Set a minimum number of buyers for a transaction to get done. Ex: Set 50 buyers minimum needed to offer 50% discount on 8GB pen drive from SanDisk.
- Deal expiration: Usually a deal lasts for 24-48 hours.
- Deal payment: Either partial or full payment has to be made upfront using credit cards, debit cards, online banking.
WHAT IS HAPPENING w.r.t GROUP BUYING sites ?
The group buying sites negotiate discounted rates with businesses/brands (local merchant or a national/international brand) assuring them of bulk buyers. Then PUSH THE DEALS through their portals. It is upto the consumer/buyer to accept or ignore the deal. Most or ALL group buying sites works in this fashion. When minimum number of buyers/consumers accept the offer then the DEAL becomes active and consumers will get the products/services at offered discounted price. On successful sale, customer gets the discount offered, seller/businesses get bulk buyers, group buying sites get some commission. This is a WIN-WIN-WIN strategy that makes seller, buyer and group buying sites happy.
Missing link w.r.t existing group buying sites ??
- Group buying sites are taking lead to bargain or negotiate discounted rates with businesses/brands on behalf of consumers or customers and PUSH THE DEALS whether they like it or not ??
- Sometimes/Most of the time, group buying sites give good deals on brand A even though consumers are looking for good offers on brand B. i.e. Not able to tap the people who are brand-specific.
Ex: If someone decides to buy Nike shoes, they won’t care even if they give good deal on other branded shoes. All they look for is a good deal on Nike shoes only.
- As group buying sites are PUSHING THE DEALS, they are waiting for consumers to opt for it and some deals will fail which is of nobody’s interest.
- Negotiation effort may not see fruitful results if the deal offered is not of consumers’ interest.
HOW TO fill the missing link w.r.t existing group buying sites ?
- I think there should be STRONG emphasis on what people or consumer wants it.
- Existing group buying sites or new startups should embrace PULL THE DEALS concept along with PUSH THE DEALS concept to understand the customers needs before offering the deal.
- Once group buying portals focus on PULL THE DEALS, they can ask customer “What you want?” instead of telling customer “BUY it if you want”. This will give the true meaning for the term GROUP BARGAINING OR GROUP DEMAND BUYING.
- If group buying sites embrace PULL THE DEALS concept then it works as follows:
- First ask customer, what they want to buy and how much discount they’re expecting 🙂 ??
- Find common interests among customer. Say 20 people are looking to buy a latest Nokia E7 mobile phone or Samsung Galaxy Tab.
- Negotiate with the businesses/brands that we’ve 20 people looking for the product/services (say Nokia E7 or Samsung Galaxy Tab).
- Then get back with to the customer with a good deal on what they are looking for rather than simply pushing the deal thinking that customer will buy it.
Advantages of PULL THE DEALS or GROUP DEMAND BUYING concept :
- I believe conversion rate will be high as you know the customer needs and then offering them a good deal after negotiating with the businesses/brands.
- Customer will get what they want at a good discounted price rather than buying something just because of discount. No need to compromise to buy something else as you get good discount on what you need 🙂
Disadvantages of PULL THE DEALS or GROUP DEMAND BUYING concept:
- Customer may demand something but after giving a good deal it is NOT guaranteed that they’ll buy it.
> However I think this can be solved by setting minimum number of buyers opt for the deal to be active. This is already in place in almost every deal sites. But the total number of customer demands may not be same as the minimum number of buyers.
- If negotiation fails with the customer to give good offers on customers’ interest/demand then the customers who are requesting/expecting good deals might get disappointed.
Don’t compromise to buy something just because they give discount (PUSH THE DEALS). Instead DEMAND what you want along with bunch of people who have common interests to get good offers (PULL THE DEALS) and buy what you like at a good discounted price.
Enjoy shopping with GROUP DEMAND BUYING…….I hope to see more group buying sites that pays more attention to customer needs in the future.
ASK for what You Want? – Bring more like minded people (if needed) to DEMAND good offers – Get Good Deals – Buy it 🙂
Stay tuned for Part 2 – Group Bargaining or Group Demand Buying