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Monday, 11 April 2011 16:13

Group buying tipped to reach $400 million

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Australians love to bag a bargain as evidenced by the 62 percent surge in online group buying during the first three months of the year.

With companies such as Groupon (via Stardeals), Cudo, Spreets and now even online laggard Harvey Norman clambering aboard the group-buying bandwagon, the potential for explosive growth is significant. Industry analyst Telsyte has suggested that this year sales could exceed $400 million.

In the three months to the end of March group buying delivered $73 million of revenues - already $10 million more than the $63 million achieved in the whole of 2010 via group buying sites.

Telsyte also suggests that consumers 'saved' $200 million by using the group buying sites - but these sorts of claims should be taken with a grain of salt. It's rather like the shopper who returns laden from the Boxing Day sales placating a spouse with the time honoured phrase; 'but look how much I've saved.'

The reality of such savings will always be debated.

And it's worth considering that while demand is ramping up quickly, group buying even at $400 million a year, is just a drop in the ocean compared to overall online spending, tipped to reach $28 billion this year, up from $24 billion last year.

Nevertheless there is a clear and growing appetite among Australian consumers for group buying and the thrill of the bargain hunt.

What do people buy? read on


A report released today by Telsyte shows that in the first quarter of 2011, there were almost 6,000 deals offered on Australian group buying sites - three times as many as during the whole of 2010.

Scoopon, Spreets, Cudo and Jump On It dominated the market. Generating 80 per cent of the sector's revenues during the first three months of the year - but many more group buying sites have opened during the last few weeks, considerably expanding the group buying gene pool.

It seems likely that the leader board will be completely remade this quarter as group buying sites jockey for position.

In a media release Telsyte senior research manager, Sam Yip was quoted saying that health and beauty deals remained strong with travel and accommodation deals also starting to emerge.

The analyst said the top two deals during the quarter were travel deals. Cudo generated $1.6 million with 2000 vouchers sold for a Thailand holiday deal priced at $792, and OurDeal sold 2800 vouchers for a $500 Daydream Island deal generating $1.4 million.


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