Group buying - Wikipedia

Group buying, also known as collective buying, offers products and services at significantly reduced prices on the condition that a minimum number of buyers ... Groupbuying FromWikipedia,thefreeencyclopedia Jumptonavigation Jumptosearch Groupbuying,alsoknownascollectivebuying,offersproductsandservicesatsignificantlyreducedpricesontheconditionthataminimumnumberofbuyerswouldmakethepurchase.OriginsofgroupbuyingcanbetracedtoChina,whereitisknownasTuánGòu(Chinese:团购),orteambuying.[1] Inrecenttimes,groupbuyingwebsitessuchasPinduoduoinChinahaveemergedintheonlineshoppingbusiness.Typically,thesewebsitesfeaturea"dealoftheday",withthedealkickinginwhenasetnumberofpeopleagreetobuytheproductorservice.Buyersthenprintoffavouchertoclaimtheirdiscountattheretailer.Manyofthegroup-buyingsitesworkbynegotiatingdealswithlocalmerchantsandpromisingtodeliverahigherfootcountinexchangeforbetterprices. Contents 1History 2Businessmodel 3Originsoftuangou 4Asia 5EuropeandNorthAmerica 6SouthAmerica 7Australia 8NewZealand 9Risingcompetition 10Seealso 11References History[edit] In2000,withfinancialbackingfromMicrosoft,co-founderPaulAllenstartedane-commercestart-upcalledMercatawithabusinessplandubbed"WeCommerce".Thewebsiteofferedhigh-endelectronicdealstoshoppersonline.Individualwebshopperswouldsignupen-massetobuythesameproductandthepriceoftheproductwouldfallasmorepeoplesigneduptobuyit.However,thewebsitewasshutdownin2001asitcouldnotcompetewithwebsiteslikeAmazon.com.[2] Recently,groupbuyinghasbeentakenonlineinnumerousforms,althoughgroupbuyspriorto2009usuallyreferredtothegroupingofindustrialproductsforthewholesalemarket(especiallyinChina).ModerndayonlinegroupbuysareavariationofthetuángòubuyingthatoccursinChina.[3][4]Undertuángòu,anitemmustbeboughtinaminimumquantityordollaramount,otherwisethesellerwillnotallowthepurchase.Sinceindividualstypicallydonotneedmultiplesofoneitemordonothavetheresourcestobuyinbulk,groupbuysallowpeopletoinviteotherstopurchaseinbulkjointly.Thesegroupbuys,oftenresultinbetterpricesforindividualbuyersorensurethatascarceorobscureitemisavailableforsale.Groupbuyswere,inthepast,oftenorganizedbylike-mindedonlineshoppersthroughInternetforums.Nowtheseshoppershavealsostartedtoleveragethegroupbuyingmodelforpurposesofbuyingotherconsumerdurables.Groupbuyingsitesarebackindemandassmallbusinesseslookforwaystopromotetheirproductstobudget-consciousconsumersinaweakglobaleconomy.[5]Groupbuyingisalsousedforpurchasingrealestateproperties.RealEstateGroupBuyingisverypopularinIndiawherewebsiteslikeGroupBookings[6]offersgroupdealsonvariousproperties. Businessmodel[edit] Ifsubscriberstoadiscountwebsitearetemptedbyadiscountoffer,theyentertheirpaymentdetailsonlineandwait.Whenaminimumnumberofpeoplesignupforthesameoffer,thedealisconfirmedandavoucherissenttotheirinboxes.Shops,restaurantsandotherretailersthatpartnerwiththesediscountwebsiteshavetotakeheftypricecuts.Butitmeanstheyhaveinstantaccesstoawholenewgroupofcustomers.[7]Theonlinegroupbuyingmarketisfragmentedamonghundredsofsmallerplayersworldwide.Themodelhaslittlebarrierstoentryandhasgainedattentionfromshoppersandbusinessesalikeglobally...[8]AccordingtoSmartMoney,byAugust2010,thereweremorethan500group-buyingsitesworldwide,includinglocalsitesthatcateronlytoasinglecityinsomeinstances.[9] Originsoftuangou[edit] Tuangou,whichtranslatesasteambuyingorgroupbuying(alsoknownasstoremobbing),isarecentlydevelopedshoppingstrategyoriginatinginthePeople'sRepublicofChina.Severalpeople-sometimesfriends,butpossiblystrangersconnectedovertheinternet-agreedtoapproachavendorofaspecificproductinordertocollectivelybargain(haggle)withtheproprietorasagroupinordertogetdiscounts.Theentiregroupagreedtopurchasethesameitem.Theshoppersbenefittedbypayingless,andthebusinessbenefittedbysellingmultipleitemsatonce. ThetuángòuphenomenonhasbeenmostsuccessfulinmainlandChina,wherebuyershaveleveragedthepowerofgroupbuying,whichhasledtoEnglishlanguagemedia,suchasmsn.com,profilingthetuángòubuyingprocess.ThepopularityofthestrategyinChinaisoftenattributedtotheChinesetraditionofbargainingforthepurchaseofgoodsofalltypes.Tuángòubuyingalsoamelioratesatraditionaldistrustofgoodspurchasedfromunknownsellersasindividualmembersofthebuyinggroupcanvouchforaparticularseller'squalitytotherestofthegroup.[10] Asia[edit] InChina,groupbuysusuallyhappenedwhendealingwithindustrialitemssuchassingle-boardcomputers.[11]Chinahadover1,215group-buyingsitesattheendofAugust2010comparedwithonly100inMarchofthesameyear.[citationneeded] English-languagegroup-buyingplatformsarealsobecomingpopular.OnlinegroupbuyinggainedprominenceinotherpartsofAsiaduring2010withnewwebsitesinTaiwan,Singapore,HongKong,Thailand,MalaysiaandthePhilippines. InIranthefirstgroupbuyingwebsiteistakhfifanandlaunchedinearly2011bytwocousinsnamedAliRezaSadeghianandSamanSadeghian.Netbarghasgrownenoughthatthecousinsarenowleadingtheteamsbehindacoupleofnewonlineventuresinthecountry.[12]TheIranianmarketforgroupbuyingwebsiteshasfiercecompetitionasotheranotherwebsitecalledtakhfifanmoreknownasfirstwebsiteand,comparedtoNetbarg,ithasmorediversifiedcategoriesforrestaurants.[13][14] EuropeandNorthAmerica[edit] RecentdevelopmentsingroupbuyinghaveledtoawideincreaseofappearancesofsimilarphenomenainEuropeandNorthAmerica.WhiletheoriginalstrategyforgroupbuyinginChinawasself-organizedandexecuted,mostofthegroupbuyinginEuropeandNorthAmericaisdoneonlythroughonlineintermediaries.Interestedbuyersare,mostoften,askedforcreditcarddetails,whichwillbechargedonlywhenarequirednumberofbuyersregister.Almostwithoutanexception,intermediarieschargevendorsapercentagefeeintherangeofupto50%ofthetotalvalueofthewholedeal.Duetothisbusinessmodel,groupbuyingremainslimitedtothephysicalservicessectorandisnotseeinggrowthaswiththeoriginalstrategyinthePeople'sRepublicofChina. Nevertheless,intermediarieswithfairlyidenticalbusinessmodelsareappearingdaily,especiallyacrosstheUnitedKingdomandGermany.Themostnotablecharacteristicofallthoseintermediariesistheselecteddealsorientationtowardslocalmarkets,boundtocitiesandtowns.LeadersincludeGroupon(andtheirUnitedKingdom'sspinoff,MyCityDeal),LivingSocial,Plumdistrict,BuyWithMe(BoughtbyGILTinwinter2011),andTeamBuy(Canada),withhundredsofcopycatsindifferentlanguages.TheGrouponandothergroupbuyingsites’businessmodelisworkingwithlocalretailstoresandrestaurantswithlocation-targetedcouponsbutnationalchainsarealsoparticipating.GapparticipatedinaGrouponpromotionduringsummerof2010thatgeneratedover$10millioninsalesinoneday.NordstromhasalsojoinedGrouponasavendor.[8] Beyondservingasameanstodrivedownbuyers’endcosts,anemergingsubsetofgroupbuyingis“communitybuying”[15]throughwhich,virtualorreal-worldcommunitiesofpeoplewhosharesomethingincommoncometogetherandpurchasewithacommonpurpose/forasharedbeneficiary.Thisincludesonlinecrowdfunding(e.g.GoFundMe,Kickstarter,andCrowdrise)aswellascrowdgifting(e.g.,Presently,Leetchi).Anotherexampleofgroupbuyingwhichexemplifiespeoplecomingtogetherforacommonpurposeisutilitygroupbuying.Consumerscometogetherinordertoobtainlowerelectricityratesbypoolingtheirusagetogether:e.g.EnPowered.AsitethatfocusesonpeoplejoiningtogethertomakeagrouppurchaseisGroupGets. Otherexamplesinclude:DYIcustomapparelvendorCustomInkanditsaffiliatesT-shirtfundraisingsiteBooster.com,[16]andRepresent(custommerchandisefrominfluentialcelebrities)-whichalsoaggregatedemandandreducecostforgroupsandoccasionsrangingfromfamilies,LittleLeagueteams,animalshelters,[17]nonprofits,#STRONGcharitablecampaigns,[18]andfanclubs.Anotherrecentdevelopmentisthegrowthofthe“paint-and-sip”industrywhichmatchespublicdemandforfunactivitieswithexcessspaceatbarsandrestaurants(e.g.PaintNite“GirlsNightOut”andPlantNiteeventsincitiesacrosstheU.S. SouthAmerica[edit] SouthAmericaasanemergingmarkethasyettoseepopularizationofnewpurchasingmodelssuchasgroupbuying.FirstintermediariesappearedrecentlyinBrazilwithslightlydifferentbusinessmodelsthanthoseproposedinEurope.Notably,thedifferenceisinthewayvolumediscountisachieved,asapost-purchaserebateinsteadofaninstantdiscount,allowingforanimmediatebuyer'spurchase.Majorcriticismforsuchmodelisinthelackofaggregationandunfitdifferentiationbetweenbuyers-thosethatwishtopurchaseimmediatelyatanypriceandthosethatarewillingtosacrificetimefordiscounts,eventuallycostingthevendorpotentialprofits.InColombia,GrouponwaslaunchedinJuly2010and,withinoneyear,thelargestmediacompaniesofthecountrylaunchedtheirowngroupbuyingwebsitesCuponidad,QueBuenaCompraandDowntownColombia,provingthereismarketforseveralbigplayers. Australia[edit] OnJanuary20,2010,Yahoo!7(anAustraliansubsidiaryofYahooInc.)boughtalocalgroupbuyingcompanybythenameofSpreets.Yahoo!7bought100%shareofthegroupdiscountcompanyfor$40million.AsofJanuary2011,Spreetshasmorethan500,000membersandhassoldover274,000vouchersinitslifetimeoflessthan2years.Throughthisacquisition,YahoohasjoinedaclusterofcorporateinvestorsincludingMicrosoft,PBLMedia,TenNetwork,andoriginalFacebookinvestorKlausHommelswhoarepursuinggrowthinthisnewbusinessmodel.[19] TheotherplayersintheAustralianmarketareScoopon,CudoandGroupon. NewZealand[edit] OnMarch22,2011,thepopularNewZealandauctionsiteTradeMehaslaunchedalocalgroupbuyingsitecalledTreatMe. Groupbuyingforbusinesses:In1963,theGovernmentStoresBoard,theprocurementagencyforgovernmentdepartmentswasprivatised.Followingthis,thegroupbuyingpoweroftheagencywasopeneduptoprivatebusinesses,enablingthesebusinessestobenefitfromsignificantpurchasingpower.Nowtradingasn3,thecompanyhasover12,000memberbusinessesandisNewZealand'slargestgroupbuyingnetwork.NewZealandbusinessescanjoinn3asmemberstoaccesssignificantsupplydiscountsfromawiderangeofsuppliersacrossmanyindustries. Risingcompetition[edit] Googlelaunchedtheirowndailydealssitein2011called"GoogleOffers"afterits$6billionacquisitionoffertoGrouponwasrejected.GoogleOffersfunctionsmuchlikeGrouponaswellasitscompetitorLivingSocial.Usersreceivedailyemailswithlocaldeals,whichcarrysomepresettimelimit.Whenthedealreachestheminimumnumberofcustomers,alltheuserswillreceivethedeal.Thebusinessmodelwillremainthesame.[20] Facebook's'Facebookdeals'applicationwaslaunchedinfiveEuropeancountriesinJanuary2011.Theapplicationworksonasimilargroupbuyingmodel.[21] Seealso[edit] Economyofscale Grouppurchasingorganization References[edit] ^"TheGrouponEffectinChina".Archivedfromtheoriginalon2February2017.Retrieved14September2016. ^Nobel,Carmen(2February2010)."GroupDiscountSitesLureSmallBusiness-TheStreet".thestreet.com.Archivedfromtheoriginalon18January2014.RetrievedFebruary7,2014. ^Steele,C.(2014)."Howdoesgroupbuyingwork? :DailyDealsBlog".thedealer.com.au.ArchivedfromtheoriginalonApril20,2013.RetrievedFebruary7,2014. ^"Consumerpower:Shopaffronts".TheEconomist.29June2006.Archivedfromtheoriginalon15April2012.RetrievedMarch12,2012. ^Lerner,Michele(2014)."Group-couponcrazecomestorealestate-MSNRealEstate".realestate.msn.com.ArchivedfromtheoriginalonFebruary22,2014.RetrievedFebruary7,2014. ^"RealEstateGroupBuyinginIndia".ArchivedfromtheoriginalonAugust13,2014.RetrievedAugust13,2014. ^"IsGroupBuyingreallyagooddeal".BBCNews.2011-02-05.Archivedfromtheoriginalon2011-02-05.Retrieved2011-02-05. ^ab"TheothercontenderintheGroupBuyingCloneWars".Archivedfromtheoriginalon2012-10-13.Retrieved2011-02-05. ^"SurgeinGroupBuyingsitesmeansweakerdeals".Archivedfromtheoriginalon2010-10-23.Retrieved2011-02-05. ^Montlake,Simon(2007-12-05)."China'snewshoppingcraze:'teambuying'".MSN.com.Archivedfromtheoriginalon2011-07-14.Retrieved2007-12-26. ^Gottlieb,Bruce(2000-07-26)."DoesGroup-ShoppingWork?".Slate.Archivedfromtheoriginalon2007-12-31.Retrieved2007-12-26. ^"InterviewwiththeFoundersofNetbarg,theIranianGroupBuyingWebsite".TechRasa.2016-03-13.Archivedfromtheoriginalon2016-03-15.Retrieved2016-03-13. ^Dehghan,SaeedKamali(2015-05-31)."FromDigikalatoHamijoo:theIranianstartuprevolution,phasetwo".TheGuardian.ISSN 0261-3077.Archivedfromtheoriginalon2019-04-12.Retrieved2017-03-06. ^"InsidetheIranTalks".TheNewYorker.Archivedfromtheoriginalon2017-02-11.Retrieved2017-03-06. ^Moss,AndrewJ.(2016-09-27)."TheMoreThingsChange".Medium.com.Medium.com.Archivedfromtheoriginalon2017-02-02.Retrieved2016-09-27. ^Castellanos,Sara(2014-04-09)."OnlinecrowdfundingsiteBoosterletsusersraisemoneyforsocialcauses".bizjournals.com.BostonBusinessJournal.Archivedfromtheoriginalon2016-10-01.Retrieved2016-09-27. ^Tepper,Danielle,S(2015-12-01)."Needaboost?T-shirtsalesstrengthenfundraisingdrives".AnimalSheltering.HumaneSocietyoftheUnitedStates.Archivedfromtheoriginalon2016-10-01.Retrieved2016-09-27. ^"#SamStrong:ARegionFightsAlongsideTwo-Year-OldWestMonroeBoyBattlingCancer".Myarklamiss.com.KTVE10NBCNews&KARD-FoxNews(Louisiana).2014-11-21.Archivedfromtheoriginalon2015-07-19.Retrieved2016-09-27. ^Stafford,Patrick(20January2011)."Australia'sleadinggroup-buyingSpreetssiteboughtbyYahoo!7for$40million".Archivedfromtheoriginalon31January2011.Retrieved2011-02-05. ^Lee,Amy(2011-01-21)."GoogleOffers,GrouponCompetitorcomingsoon".HuffingtonPost.Archivedfromtheoriginalon2011-01-25.Retrieved2011-02-05. ^"Facebook'sGroupon-LikeServiceGoesGlobal".TheNewYorkTimes.2011-01-31.Archivedfromtheoriginalon2012-03-28.Retrieved2011-02-05. 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