Global Players Heat up the Indian Group Buying Market

Date:   Tuesday , May 03, 2011

As the purchase on the internet is becoming more acceptable to masses across the country, online shopping is increasing in its popularity in a very fast pace. The extensive use of internet by the young people and its spread to the middle class has accelerated the growth of group buying industry in India and the discount deals through coupons.

These sites partner with local restaurants, shops, or other retail businesses which are willing to provide large discounts on condition that their name is spread to a number of new customers. Once a minimum number of people sign up for the same offer, the deal is confirmed and a voucher is sent to their inboxes. According to smartmoney, by August 2010, there were more than 500 group-buying sites worldwide, including local sites that cater only to a single city in some instances.

India’s fledging online discount coupon market is set to soar as it is said that Indians spend nearly $100 billion a year on discretionary retail services and migrating even as low as two percent of those spends online, it’s a $2 billion market.

Groupon is said to be the global market leader in the online group buying industry and the company has raised $950 million (`4,294 crore), online seller of discount coupons. The website has made a grand entry into the Indian market with the acquisition of three Web-based firms including Kolkata-based Groupon had recently turned down a $6 billion acquisition offer from Google. The Chicago-based website’s success has spurred much of the action in the group buying arena with countless competitors and clones coming up in Europe and the United States.

Snapdeal is the Indian market leader and the website offers deals covering all the major cities like Delhi, Mumbai, Chennai and Bangalore. The website provides vouchers and discounts at a reduced price with its tie-up with the various business partners.

Apart from Sanpdeal, there are numerous companies and websites offering group buying deals and online discount coupons in India such as Deals and You, Taggle, MyDala, Scoopstr and more. Deals and You has been ranked as the number one group buying portal in India by comScore. The site had the highest total number of ‘unique visitors’ and the website had gathered one million members in 200 days. Taggle is a Bangalore-based company that entered the group buying field with a funding of $8.75 million from Greylock Partners and Battery Ventures. The company brings in offers from top brands very frequently and the offers are available only for a limited period of 1-4 days. MyDala is a Delhi based startup that offers group buying facilities to the users. The site brings offers from restaurants, saloons, spa etc. at remarkable discounts.

Ebay India has decided to plunge into group buying market with its Ebay Social Shopping arm offering daily deals aimed at group buyers. Walking the similar lines of other group buying web services, the deals get active only when eBay Social Shopping generates more than the specified minimum number of sales chosen by the merchant. Once it reaches the numbers, the deal gets activated and all the eligible customers get an email voucher specifying the details of the deal.

With the entry of such big global brands into the Indian market, the online group buying industry and the discount coupon market is expected to witness more merger and acquisitions in the near future which will further accelerate the growth of the industry.