group buying

Topics: Sales, Commerce, Marketing Pages: 30 (819 words) Published: October 20, 2013

 

Group
 Buying
 Industry
 Overview
 

 
Before
 we
 can
 group
 buy
 via
 Internet,
 tuangou
 was
 developed
 in
 China
 a
 few
 
years
 ago.
 Tuangou
 means
 the
 same
 thing
 as
 group
 buying
 or
 collective
 buying.
 
Tuangou
 allows
 people
 to
 invite
 other
 people
 and
 to
 buy
 the
 same
 merchandise
 
at
 the
 same
 in
 large
 amounts.
 Therefore
 buyers
 will
 benefit
 from
 reduced
 price
 
and
 sellers
 will
 benefit
 by
 selling
 multiple
 quantities
 at
 once.
 Unlike
 modern
 
group
 buy,
 there
 is
 a
 minimum
 quantity
 or
 dollar
 amount
 for
 a
 specific
 item
 in
 
tuangou.
 Otherwise
 there
 will
 be
 no
 price
 discount
 or
 seller
 will
 not
 sell
 their
 
products
 to
 you.
 Individuals
 typically
 don’t
 need
 multiples
 of
 one
 item
 at
 one
 
time.
 So
 in
 order
 to
 participate
 in
 tuangou,
 people
 started
 to
 invite
 others
 who
 
have
 the
 same
 need
 for
 the
 exact
 item.
 These
 people
 can
 be
 your
 family,
 friend,
 
or
 even
 totally
 strangers.
 Groups
 are
 often
 organized
 informally
 on
 BBS
 site
 or
 
can
 be
 organized
 via
 specific
 tuangou
 site.
 Instead
 buying
 vouchers
 online,
 
people
 who
 participate
 in
 tuangou
 will
 actually
 bargain
 and
 negotiate
 with
 
wholesalers
 or
 even
 manufacturers
 face-­‐to-­‐face
 

 
Nowadays,
 most
 of
 the
 group
 buying
 in
 Europe
 and
 North
 America
 is
 done
 
through
 online
 intermediaries.
 Those
 online
 intermediaries
 connect
 both
 
customers
 and
 merchant.
 They
 firstly
 negotiate
 the
 deal
 with
 the
 merchants
 then
 
put
 deal
 on
 their
 website
 for
 customers
 to
 pick.
 The
 top
 online
 intermediaries
 
are
 Groupon
 and
 livingsocial.
 Becoming
 a
 vendor
 on
 group
 buying
 platform
 has
 
also
 became
 an
 effective
 marketing
 strategy
 to
 generate
 brand/product
 
awareness
 especially
 for
 small
 and
 local
 companies.
 The
 competition
 between
 
those
 group
 buying
 online
 intermediaries
 are
 becoming
 increasingly
 intense.
 
Traditional
 group
 buying
 platform
 are
 now
 facing
 direct
 competition
 from
 other
 
social
 media
 company
 such
 as
 google
 (google
 offer)
 and
 facebook(facebook
 deal)
 
who
 have
 the
 similar
 business
 model
 and
 trying
 to
 leverage
 their
 strength
 in
 
their
 large
 amount
 of
 user
 bases.
 
 

 
How
 does
 this
 industry
 create
 value?


Cited:  Oct.
 2013.
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