You’ve heard of supersizing. That’s when the meal size is titanic and the price a bargain. You can’t finish the meal and are forced to bag it and then forget it in the back of your fridge. Until the day you rediscover the leftover bargain meal, which by now has fungus and has turned into a minor science experiment.
The end goal of all business is to sell you more of the same stuff. For example, two tubs of ice cream, when half would still be over the medically recommended limit for most. Sucks, doesn’t it?
Online: There are websites selling everything based on the simple power of collective haggling.
But a bunch of enterprising souls have come up with a solution. It’s called group buying. Instead of you having to go on a buying binge and making the seller’s cash register ring with joy, it can be the other way around. Sellers put together buyers for the same thing—say, a Team India T-shirt, a 3D TV, a meal at your favourite restaurant, a day at the spa, a holiday to Spain, diamonds, even a tarot card reading—and offer discounts because of the volumes involved. In the age of crowd sourcing, can crowd-bargaining be far behind?
This is how group buying works: A website (See Bargain Blast) offers a product, service or experience at a lowered price. Let’s say tickets for the Led Zepplica concert—anyone into replica rock here?—that actually cost Rs 500 at a discounted price of Rs 300. You, being an incurable Led Zep fan, register on the site for a ticket. Your credit card is charged Rs 300 for the ticket but, for the moment, the amount is not transferred to the seller. The seller needs a minimum number of buyers to “activate” the deal, or make it “go live”, in online bargain basement parlance. Once the seller has the required minimum number of buyers registered on the site for the Led Zepplica concert, the money is transferred via your card to the seller and you get your ticket.
The number of buyers for the deal to go “live” can be anywhere between two and 200, depending on the value of the product. The more the number of buyers, the lower the price can go.
There are websites selling everything based on the simple power of the collective haggle.
So, what if the seller doesn’t get the minimum number of buyers? The deal crashes and no one gets tickets at the bargain price, the credit card is not charged and everyone is back to square one. But in today’s age of social media and electronic buzz, can you imagine such a situation? Not likely.
Almost every group-buying site has handy social media tools that let you promote the deal you are after so that—to continue with the heavy metal concert example of Led Zepplica—you find kindred souls who can’t live without replica rock. A couple of tweets, a Facebook status message and an SMS or two later, you could find mock metal fans communing at the group-buying site, activating the offer with the sheer power of their numbers and enabling your presence at the cut-rate concert. For bargain hunters, it’s like buying a stairway to heaven.
Group buying is a sharp and sensible mix of e-commerce, social commerce and reverse auctions. And with the growth in mobile usage and mobile commerce, not only will group-buying deals get instantly viral, they will also reach more cost-conscious consumers.
Group-buying sites have been seducing venture capital (VC) firms for some time now. Last year, Delhi-based Jasper Infotech, which owns Snapdeal.com, bought Bangalore-based group-buying site Grabbon.com. Recently, Jasper raised $12 million (around Rs54 crore) from Nexus Venture Partners and IndoUS Venture Partners. Bangalore-based group-buying site Taggle raised $8.75 million from Greylock Partners and Battery Ventures. Battery Ventures is also an investor in US-based Groupon, the mother of all group-buying sites. Mumbai-based Wanamo.com was bought by Gurgaon-based Smile Interactive and Group Buying Global AG, that operates across four continents, and relaunched as Dealsforyou.com. Koovs.com is about to see an infusion of VC funds. And last month, Groupon, with a valuation of $6.4 million, bought Kolkata-based deal-of-the-day and group-buying site Sosasta.com. Amid all the activity, there have been a few casualties too. Mobstreet.in that served Mumbai recently shut down with a notice on its site saying “MobStreet has closed shop due to execution/scale challenges and for strategic reasons. It was great serving all of you.”
For those who came in late and just discovered the action around group-buying sites, it’s never too late. Sign up with them for deals in your city and start getting SMS or email updates on what is available for a song. What are you waiting for? You don’t want to be left behind in the bargain.
Bargain blast: The most popular group-buying sites in India
10,300+ like* it on Facebook.
It operates in more than 30 cities—from Ambala to Vellore.
54,000+ like it on Facebook. It has Silver membership, a reward-based plan, for inveterate deal hunters, with Gold and Platinum membership coming soon.
98,700+ like it on Facebook.
It covers 20 cities.
12,400+ like it on Facebook.
It offers multiple payment options. If you follow it on social media sites and give referrals, it gets you loyalty points which can later be used for transactions.
188,000+ like it on Facebook.
Its “prepay” facility simplifies the payment process.
The relative popularity of a group-buying service on social media sites such as Facebook indicates that the tipping point for group buys may be simpler to achieve.
Arun Katiyar is a content and communication consultant with a focus on technology companies. He is a published author with HarperCollins and has extensive media experience spanning music, print, radio, the Internet and mobile phones.
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