Click to edit Master subtitle style

Group 2 : Kinshoo (40) |Adheeth(01) | Arisha(32) | Amrapali(34) 5/23/12

History of group buying

Group Buying is based on a Chinese concept called Tuangou. The popularity of the strategy in China is often attributed to the Chinese tradition of bargaining for the purchase of goods of all types Group buys can also be variation of Tuangou buying that also occurs in China, in which an item must be bought in a minimum quantity or dollar amount, otherwise, the seller will not allow the purchase.

5/23/12

What is group buying?

Several people - sometimes friends, but possibly strangers connected over the internet - agree to approach a vendor of a specific product in order to haggle with the proprietor as a group in order to get discounts. The entire group agrees to purchase the same item. The shoppers benefit by paying less, and the business benefits by selling multiple items at once.

5/23/12

Group on-the mother of deals

Grouponis adeal-of-the-day website Launched in November 2008, Chicago The idea was created by Andrew Mason Groupon features a daily deal on the best stuff to do, see, eat, and buy in more than 300 markets and 35 countries. Groupon Origins Groupon grew out of a website called The Point, a website launched in November 2007 that lets you start a campaign asking people to give money or do something as a group.
5/23/12

Groupon is growing fast with a projected revenue of $500 million for 2010. At just under 2-years old in April of 2010, the company was valued at $1.35 billion. Groupon also owns several international operations,

the European-based MyCityDeal (17 May 2010) the South American Clan Descuento (22 June 2010) the Japanese service Qpod.jp Russian Darberry.r

5/23/12

Group Buying Features

COLLECTIVE PURCHASING POWER:

A group buys products at a lower price, which were previously available at higher price.

New price suits every individual & also fulfills individual needs. Benefits of bulk discounts. Gives volume business to dealer too. WIN-WIN situation for both.

5/23/12

5/23/12

5/23/12

The company serves one Groupon in each of the markets it serves. If a certain number of people sign up for that offer, then the deal becomes available to all. If the predetermined number is not met, no one gets the deal that day.
5/23/12

BUSINESS MODEL

CUSTOMER SIGNS UP @ DEAL SITE

DEAL REACHES CRITICAL MASS

CUSTOMERS PAY DEAL SITE

DEAL SITE FEATURES DEAL CUSTOMER REDEEMS COUPON @ MERCHANT

MERCHANT SIGNS UP @ DEAL 5/23/12 SITE

DEAL SITE PAYS MERCHANT SHARE

BENEFITS TO CUSTOMERS Deep Discounts

Discover services/merchandise that they didnt know of Access to new services/merchandise Smaller side deals in addition to the main deal Deal personalization based on voluntary disclosure of preferences
5/23/12

Deals divided up by ZIP code

5/23/12

CUSTOMER DEMOGRAPHICS Early Adopters: Highly affluent with

disposable income Urban Females 18-34 years Likely FACEBOOK & TWITTER users 60k-200k users/city 100-1000 deals/users/city
5/23/12

BEST SUITED BUSINESS High fixed business

High customer acquisition cost Business thriving on repeat customers

5/23/12

MERCHANT ECONOMICS 24-hour period

The viral nature of this promotion means that sales can be on the order of hundreds to thousands of orders in a single day. Revenue: Retains ~50% of deal minus credit card fees Redemption Rate: ~80%
5/23/12

Incremental Spending: Gap

Contd..

Business owner makes only 25% profit. Willing to take short-term loss because: Cash flow boost. Not everyone will redeem their voucher. Inexpensive, effective advertising. New customers& Return customers.
5/23/12

v v v v

KEY ISSUES TODAY

5/23/12

Taobaos Amazing Deal

Click to edit Master subtitle style

5/23/12

Taobao.com, a Chinese group buying website made history by selling 205 Mercedes-Benz smart cars in 3.5 hours in October 2010. Original price of car: RMB 176,000 Taobao offered a 23% discount for group purchase (RMB 40,000 discount on original price) Down Payment : RMB 1,000 The first car was sold after 24 seconds, 55 cars were sold after six minutes and 205 cars were gone after three and a half hours.

5/23/12

Indian Group Buying Sites

5/23/12

Founder and Team : Anisha Singh Funding Source: PE firm CX Partners + US investors When Launched: 2009 Website Ranking: 17,989 Employees: 34 employees

5/23/12

Founder and Team : Kunal Singla and Kanishk Shukla Funding Source: SELF-FUNDED (about Rs 10 lakh) When Launched: 2009 Website Ranking: 18982 Employees: 12 employees

5/23/12

Founder and Team : Guneet Singh and Harish Bahl Funding Source: Group Buying Global AG When Launched: 2009 Website Ranking: 7506

5/23/12

Founder and Team : Satish Madhira Funding Source: Self-funded (Rs 10 crore) + Angel When Launched: 2010 Website Ranking: 23978

5/23/12

Founder and Team : John Kuruvilla, Ujjwal Tickoo and Tej Arora Funding Source: US investors When Launched: 2010 Website Ranking: 32073 Employees: 20+

5/23/12

Founder and Team : Jasper Funding Source: Self-funded and from INDO US ventures When Launched: 2010 Website Ranking: 1008 Employees: 230+ employees

5/23/12

The Buying Process

5/23/12

5/23/12

5/23/12

5/23/12

5/23/12

Coupons IVR Telephonic

Backend of a Clone
5/23/12

5/23/12

5/23/12

The BiG Mommy has Entered India

Groupon has Bought Sosasta.com and has entered india as Groupon India Pvt Ltd. The value of the deal is not known Its more of a talen acquisition rather that customer base

5/23/12

Many more Players

Its easy to start a clone site Zapak and many more players to venture into Expect TOI, IBNLIVE, NDTV etc to feature a deals section soon How many will survive?? Big money!!!
5/23/12

Thank You

5/23/12