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Group buying boosting local businesses

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Popularised by sites like Groupon, the group buying trend has helped numerous local businesses to see their outlet numbers ringing more recurrently.

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Kunal Bahl
Co-founder and CEO, Snapdeal.com

Most group buying sites offer localised deals and discounts in specific cities. Such offers include percentage discounts at participating restaurants, coupons for savings off a minimum purchase at retail stores, two-for-one event ticket specials and other similar deals. Here an offer only becomes legitimate if enough members sign up for a certain promotional deal. Group buying encourages viral sharing of individual deals. The group buying site offers a certain amount to a referee for making a referral. However, if the minimum sign-up for a certain promotional offer is not met, the deal does not proceed and no one’s credit card is charged.

Impulsive fame of the concept
Kunal Bahl, Co-founder and CEO, Snapdeal.com, a group buying site says, “The sudden popularity is due to the unique business model, which is attractive to all the stake holders involved in the value chain - the business owner, the end customer and the platform owners.  Business owners have multiple benefits like new customer acquisition, targeted communication & inventory liquidation. The end customer has the benefit of availing unique and great services at a great value, and the platform owners, serve as a bridge between the two”.

Benefits it offers
An entrepreneur gets to reach to a certain number of customers which is otherwise difficult to reach. A customer gets discounted offers, deals free of cost and the platform owner gets revenue earning from both the parties. However, Mr. Bahl thinks, “From the perspective of an entrepreneur, it is very challenging, since every day, the needs and demands of the customer have to be met, to ensure that they come back to the site for repeat purchases”.

The concept in length and breadth
Mr. Bahl says, “Group buying platform is an online channel through which retailers acquire customers and reach out to target audiences within a short span of time. The retailers presenting offers through group buying sites have the opportunity to capture customers that may have otherwise been difficult to reach. It is a very cost effective model for the retailers, given that it is a completely variable model, i.e, there is no fixed cost upfront. The customer acquisition cost is given out as a discount offer to the websites”.

Comments (2)Add Comment
lots of advertising
written by Roycerus, July 14, 2011
They have a huge building covered with an ad for snapdeal.com in one of the busiest office areas in Gurgaon - they bid on adwords for the keyword search "snapdeal.com" - so even if they are first on the SERP they still want to pay Google. They are growing at an exceptional rate but probably spending way too much to gather up subscribers for something that might sell later.
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GBs trending
written by robi, July 12, 2011
GB's a trending topic these days. people are responding to it positively while companies pitching on this idea are earning good return. Some even working on the next level for eg., a village has been renamed Snapdeal nagar recently, because the company helped its natives get fresh water. If this is CSR and not publicity, we must appreciate such efforts. Such noble efforts should continue.
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