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.
Group Buying Website Business Model:
Take Groupon as example:
- Groupon negotiate with suppliers to offer deals
- Groupon promote deals and gather consumers through its marketing channels
- Groupon sells coupons to consumers and charge commissions from suppliers Features:
- Consumer pays before purchasing: ensure the deals get done；accelerate the cash flow.
- Large discount for collective buying in limited time and items：create a phenomenon Panic Buying，encourage customer wowing the deals by word of mouth or social media
- Product and service type not limited by industry.
- Achieve a Three-Win situation for all parties involved
Market Potential in Canada
About 42 per cent of the Canadians familiar with group buy sites said they signed up to receive daily offers via email, compared to 34 per cent of U.S. respondents. Nine per cent of those Canadians also said they buy a discount voucher every few weeks, two per cent said they buy weekly, and one per cent said they buy something every day.
How to Achieve Sustainable development?
Using social media marketing!!!
Consumer based is the most critical element for group buying websites. Social media marketing (Twitter, Facebook, Instalgram Campagin) helps to:
- Identify consumer need. Whom they want to buy from. Get the first mover advantage.
- Gather as many users as possible to generate most reliable marketing promotional materials. (User generated content)