Telsyte expects the group buying market to grow an additional 30 per cent in this year, exceeding $600 million, and to reach $1 billion no later than 2015.
According to Tesyte's senior research manager, Sam Yip, increased focus on physical product sales in group buying will 'change the face of the industry and introduce competition between deal of the day and grocery and discount online department stores.'
The best performing category in 2011 was physical products - like jewellery, electronics and clothing - and Yip says physical products now accounts for 30 per cent of the total market.
According to Telsyte, 2012 will be a year of continued market growth fuelled by the refocussing of group buying sites on driving customer loyalty, and Yip says that loyalty programs and targeted deals will continue to drive sales, while leading sites will enhance their mobile commerce strategies and expand their offerings.'
Telsyte reveals that the top eight group buying sites for the 2011 calendar year were Scoopon, LivingSocial, Spreets, Cudo, Groupon, OurDeal, Deals.com.au, and Ouffer.
'About 95 per cent of the market revenue is generated by the top eight sites,' Yip says.
While there were more than 80 sites in operation in 2011, Telsyte expects that the barriers to entry will increase in 2012 and some sites will fail due to lack of scale.
According to Yip, this year the local group buying sites will battle it out with the multinational players meaning bigger discounts, better quality deals, more offers, and more loyalty programs - all for the sake of winning and keeping Australian customers.
Telsyte reports that the Q4 results show the continued rise of the multinational group buying sites like LivingSocial and Groupon, with Groupon market leader in December 2011, and LivingSocial the leader in Q4.
However, as reported by iTWire, Australian owned and operated Scoopon was the overall market leader in 2011.