The fact that a lot of group-buying websites that mushroomed in 2010, either closed down or changed their model, doesn’t really reveal the current shape of online-deals market in India.
After my experience with 2 of the worst eCommerce websites in India, I was doing some study on the evolution of group-buying sites in the country, the kind of products & services which are doing well online and the ones which are not. Some of the information I found was fascinating.
There was a time when most of the group-buying sites were selling cheap deals for Spas and Restaurants. The problem with the approach was – focus on the customer and not the merchants. Most sites started to charge a token, which meant – the customer pays a fixed amount to the website and may or may not avail the product / service by paying the balance to the merchant. It’s interesting to know that only 8-10% customers actually availed the vouchers. This was a step towards losing merchants’ faith or getting those merchants on board which did not bother about their brand.
Gradually, there came a time when the merchants that most websites tied up with, started to become biased against the customers walking in with a deal voucher. They would offer differential service or would not maintain good standards. With over two dozen group-buying websites, this market became crazier than ever before.
When the dust settled, the ones that managed to stand tall improvised the model and started selling deals, which were not available, online. This included healthcare, holidays, fashion, electronics, etc. I remember seeing a great deal for smartphones on a group-buying site, which once sold just Spa and Restaurant vouchers for less!
Apparently, the untapped online market in India is worth 1.5B. That’s one reason why stronger players stayed back and are doing well now.
It’s smart thinking by sites like Groupon India, which, despite coming late in the Indian market, capitalized on the impulsive behavior of the customers, leading them to buying products from good manufactures that come at a good deal and plan impromptu vacations for the weekend!
Recently, Groupon India tied up with Tata Group’s multi-branded electronics store, Croma to sell electronics, online. Partnerships like these are changing the course of (once) group-buying websites.
It’ll be interesting to see the use of technology and logistics to sell to the Tier B and C cities, the untapped online market, in the years to come.
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