Hello everyone and apologies because I’ve been away since a long time. I’ve been reading and hearing about it since a few months and hence I thought about covering “Group Buying” in today’s post. Well any monkey in a suit can break the word down and understand, that the concept probably revolves around buying something … “umm” … in a group. And if that monkey is educated and well dressed, he will probably relate the the concept of group buying with discounts. It’s okay even if you are an illiterate, undressed monkey and still understand what it means. I don’t stereotype.
Group buying is a term basically used to define a collective buying effort to maximize discounts by offering to buy in volumes from the seller. Imagine if a piece of cheese (I’m fond of using absurd objects as examples) costs Rs. 100 for one individual; that’s a reasonable profit margin for the seller and he might not be in a position to give discounts. But if 100 people want to buy that piece of cheese, and they ask for a discount on the retail price of Rs. 100, do you think it would cause the seller to rethink his profits. That’s Rs. 10,000 worth of cheese with a high profit margin as compared to a single cheese for the seller, and he is in a much better position to offer a discount on this large transaction. This my friends, is the simple concept of group buying that persuades the seller to reduce his profit margins, through volume sales. So when consumers realize that they have certain powers, they can and will exercise them.
Now this idea seems nice enough but where is that spark? Where does the brilliance seep in? Well it seeped in alright like rainwater seeps into Karachi’s underpasses. Someone decided to create a website and offer 50% discount on a pizza. That someone created Groupon.com a deal of the day website. Groupon, created in November 2008, is now valued just under USD 2 billion and is on its way to become the first business to earn one billion in sales in the shortest time. Google offered to buy them out for USD 5.3 billion, but the offer was turned down.
With reference to how Groupon became such a big name the answer is simple. Expansion; they saw potential markets and seized the opportunity. Did their research and either bought out competition in that market or launched. Their most recent acquisition is SoSasta.com in India. As far as I know Groupon has not moved into Pakistan; but we do have a website coming out of Islamabad by the name of Groupin.pk. It seems like a good venture; a nice website with a good layout. They are in the process of offering deals but their deals are restricted to Islamabad only.
Now someone needs to get into Karachi territory and offer group discounts to the masses and if by any chance any one of you makes the move, please do bring a group buying deal for discounted membership at Pavilion end. No specific reason, but I just want one .