Groupon offers clients the chance to save a decent amount of money, when and where it suits them. It is a simple enough principle. The business registers with Groupon. Groupon lists the deal on its site free of charge.
At that time, more than 2, Chinese group-buying clone sites were already competing aggressively in a highly saturated market.
While Groupon might have pioneered the group-discount model in the Western world, the concept of group-bargaining already The groupon effect in the Chinese culture.
What forces helped shape such rapid growth in this industry in China? How are group-buying companies responding to the competitive landscape? And what are The groupon effect implications for Chinese consumers today?
Group-buying, or tuangou, became popular in China as early as Chinese consumers formed groups that would bargain for goods ranging from household supplies to automobiles. According to Han Zhen Hua from Beijing Foreign Studies University, a local participant, groups of individuals interested in group-buying auctions would gather in homes or conference rooms to bargain with vendors, purchasing items in large quantities to receive substantial discounts.
Han once participated in a tuangou for home construction materials where food and tea were served to all. The crowd cheered whenever negotiations heated up and evolved into yelling matches between the negotiators and suppliers.
Although news of group-buying activities initially spread through word-of-mouth, online forums and blogs soon became the main form of communication.
The concept of tuangou took off in China due to both the Chinese culture of bargaining and the burgeoning number of online users. Group-buying reached the U.
Group-buying in China Today How does the tuangou model work? Vouchers are also offered for a wide variety of products, such as skincare items or dietary supplements.
These vouchers are available for only a limited period of time the window can be as short as 24 hoursthus creating a sense of urgency to buy. The time limit and the attractive discount often induce impulsive purchases. Vendors also benefit from group-buying, which can attract new customers.
In addition, group-buying bridges offline and online commerce by serving as a new type of Internet advertising channel for brick-and-mortar retailers. In China, consumers are drawn to tuangou not only by the discounts, but also by the unique types of deals available.
Chinese sites offer coupons on jewelry, automobiles and even real estate, items that are rarely featured in the U. The range of products and services available in the Chinese group-buying arena is constantly expanding. Online raffles and other innovative tactics are also employed to incentivize consumer purchases.
Since then, the number of tuangou companies has exploded. Estimated to be more than 1, at the end ofgroup-buying websites more than doubled to 4, during the first half ofsuggesting that, on average, just over nine new sites were established each day.
Group-buying companies in China fall into three main categories. First, there are the third-party independent websites backed by venture investors. Top market players in this genre include Meituan, Lashou, Groupon.
The second group comprises tuangou channels that span leading social networking sites, e-commerce and life-services portals.
Taobao, Renren, Dianping and Third, deal aggregators consolidate coupon information from hundreds of group-buying sites. Although the Chinese group-buying industry has been in existence for only 18 months, it has already attracted millions of dollars from venture capitalists.
With Groupon, the largest of the global group-buying companies, completing an IPO in November, Chinese rivals have also intensified their chase for cash. It is not hard to see why the group-buying market in China is drawing so much attention.
While some research firms put the estimated sales volume in billions of dollars, most of the data suggest that tuangou sites generated somewhere between RMB million and RMB 1. According to a Chinese market report by tuan Byusage had ballooned to Current estimates suggest that China is adding approximately 80 million new online users each year.
In fact, about a third of the entire Chinese online population surfs the web at such establishments. In addition, Chinese mobile vendors offer simple web-enabled phones at attractive prices, and mobile operators provide affordable mobile data plans.
By Junemillion mobile users were surfing the web using their handsets, and this number is growing rapidly. The availability of affordable phones and data plans allows users to browse online and participate increasingly in group-buying.The effect Groupon had Mike Frey / June 9, / 2 Comments While there is plenty of debate over Groupon, this blog is not going to be dealing with “does it train consumers to only buy things at 50% off,” but rather, to talk about one particular client that we have that just recently did a Groupon and their skybox2008.comon: W.
Main St, Eagle Point, , Oregon. Effects on New Deal On the United States Even though there is no questioning the efforts of President Franklin D.
Roosevelt, one has to ponder on whether the New Deal was really of any help or did it cause more damage than help. Even today its success is a topic of raging debate, which has left the leading economists of the world divided into. Abstract: Daily deals sites such as Groupon offer deeply discounted goods and services to tens of millions of customers through geographically targeted daily e-mail marketing campaigns.
In our prior work we observed that a negative side effect for merchants using Groupons is that, on average, their Yelp ratings decline significantly. Feb 18, · But even though the Groupon effect makes it easier to bring people together to oppose unpopular regimes, it may be harder for new technologies to overcome the “day after” problem.
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Of all the deal sites, Groupon has the largest network of subscribers. Their platform is clean and user-friendly and, while perhaps not the most stylish, if you want to .