Online Group Buying – IndiaDecember 2010
Executive Summary               Group deals websites are e-Commerce sites that leverage social networking to find enough b...
•Market Overview•Drivers & Challenges•Trends•Investments•Competition•Social Media Analysis      ONLINE GROUP BUYING MARKET...
Group deals websites leverage social networking to find enough buyers to avail bulk discounts from the merchants What is G...
Drivers & Challenges – Summary  Drivers                                                                      Challenges  P...
Trends – Summary                                       Introduction of Innovative                                         ...
The group deals websites market has some key players who are constant expanding their offerings Competition - Overview    ...
Online Group Buying Portals (1/11)                      Company 1 - Overview                                              ...
Company 1                                                             Analysis of Posts • On social forums, users have sho...
Thank you for the attentionThe Online Group Buying – India report is part of Business Services Industry Series.For more de...
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Market Research Report : Online Group Buying Market in India 2010

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For the complete report, get in touch with us at : info@netscribes.com

The online group buying market in India is steadily growing due to increasing purchases on the internet becoming more acceptable to a large array of consumers. Increase in Internet usage coupled with the rise in discretionary spending among the middle class will translate into a large profitable market. New and existing players have been capitalizing on the opportunity by adopting various business models towards edging out their competitors. The market has also attracted investments from private equity players who realize the potential in this market.

The report provides a brief overview of the online group buying market and highlights the various business models adopted by players. This is followed by an analysis of the drivers which explains growth factors such as proliferation of internet and extensive use by young population, growing middle-class and increasing discretionary spending, increasing popularity of social networking websites in India and marketing & lead generation platform for local service providers. The key challenges identified include poor online payment gateways and rigid consumer perception. The major trends analyzed include introduction of innovative payment options, launch of a group buying tracker portal, deals offered in high value segments, group buying moves to television and entry into international markets. It also includes information regarding the major PE investments in the market.

The competition section offers an overview of the competitive landscape in the market and includes the performance of players based on the traction they have received daily. A snapshot of the players in the market includes information regarding their coverage, offerings, expansion plans, financials and traffic providing an insight into the existing scenario.

The social media analysis provides an insight into the services offered by the top 3 players based on market perception. The information regarding these players has been collated via a study of the top social media platforms in order to indicate consumer sentiments towards the brand.

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Market Research Report : Online Group Buying Market in India 2010

  1. 1. Online Group Buying – IndiaDecember 2010
  2. 2. Executive Summary Group deals websites are e-Commerce sites that leverage social networking to find enough buyers so that merchants get volumes of business and the buyers become eligible for group discounts Market Businesses are applying this concept via internet where it is used as an aggregator to provide benefits to the consumer and the merchant through group buying websites Drivers: Challenges: Proliferation of Internet and extensive use by Poor online payment gateways LE young population Rigid Consumer Perception Drivers & Growing middle-class and increasing discretionary P spendingChallenges Increasing popularity of social networking websites in India AM Marketing & lead generation platform for local service providers S Introduction of Innovative Payment Options Launch of a Group Buying Tracker Portal Trends Deals offered in high value segments Group Buying moves to Television Entry into International Markets Around X players have entered the market Player 1, Player 2, Player 3 and Player 4 are key playersCompetition Players have to rely on local presence and network, and need to quickly build its subscriber base to garner higher market share ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 2
  3. 3. •Market Overview•Drivers & Challenges•Trends•Investments•Competition•Social Media Analysis ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 3
  4. 4. Group deals websites leverage social networking to find enough buyers to avail bulk discounts from the merchants What is Group Buying? • Group buying or crowd buying deals is not a new concept, it works like cooperatives, where a large number of people buy from a merchant to avail a discounted price • Group deals websites are e-Commerce sites that leverage social networking to find enough buyers so that merchants get volumes of business and the buyers become eligible for group discounts LE • Businesses are applying this concept via internet where it is used as an aggregator to provide benefits to the consumer P and the merchant through group buying websites • Group-buying operations through these sites, typically, expand city by city as the deals have to be local. Businesses SAM from spas, restaurants and adventure getaways act as the main source of such offers U.S. major group deals website ‘C1’ valuation of INR X bn and Company C’s interest in buying it has resulted in U.S. major group deals website ‘C1’ valuation of INR X bn and Company C’s interest in buying it has resulted in major activity in the group deals websites in India with young companies trying to replicate a C1 in India major activity in the group deals websites in India with young companies trying to replicate a C1 in IndiaSource: X ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 4
  5. 5. Drivers & Challenges – Summary Drivers Challenges Proliferation of Internet and extensive use by young population Poor online payment gateways Growing middle-class and increasing discretionary spending Rigid Consumer Perception Increasing popularity of social networking websites in India Marketing & lead generation platform for local service providers ONLINE GROUP BUYING xxx MARKET IN INDIA 2010.PPT 5
  6. 6. Trends – Summary Introduction of Innovative Payment Options Entry into International Launch of a Group Buying Markets Tracker Portal Key Trends Group Buying moves to Deals Offered in High Value Television Segments ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 6
  7. 7. The group deals websites market has some key players who are constant expanding their offerings Competition - Overview Performance – Players (Daily Visitors) • Around X players have entered the market C1 V1 • C1, C2, C3 and C4 are key players in the group deals websites market C2 V2 • Players have to rely on local presence and network, C3 V3 and need to quickly build its subscriber base to E C4 V4 L garner higher market share C5 V5 Plan 2 MP • Success for the website will depend on Plan 1 and C6 V6 SA • Market witnessed consolidation as well C7 V7 Company Y, owner of C2 acquisition of Bangalore-based C8 V8 Company Z C9 V9 Gurgaon-based Company T and Company P bought Mumbai based Company L and rebranded it as C3 C10 V10 • Intense competition could pose a threat to the sustainability of business model at low margins • Group deals websites get a% average margin on • C1, C2 and C3 have witnessed strong traffic deals. However, with the increasing competition that • C6 has the largest number of Facebook fans but the number could reduce same hasn’t translated into traffic for the websiteSource: ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 7
  8. 8. Online Group Buying Portals (1/11) Company 1 - Overview Online Traffic Statistics Person 1 (Chairman), Person 2 (CEO), Founders Person 3 and Person 4 Global Traffic Rank – G1 Year of Incorporation January, 20-- Headquarters Location 1 Employees E1 Coverage (Cities) City 1, City B, City C and City D Followers Twitter – M (as on L Dec 20--) Facebook - I Traffic Rank (India) R1 Daily Pageviews* R2 Daily Visitors* R3 Time spent on site (minutes) R4 Business Highlights • Partners with designer brands across Sector 1, Sector 2 and Sector 3 and offers limited time prices to members • Received investments of INR G mn from Company X which will be utilized in growing company’s product offering, strengthening its enterprise technology, expanding its distribution capacity and funding future growth initiatives SAMPLE • Members-only website that retails Product 1, Product 2 and Product 3 upto a% discounts • Ships B orders every day and has monthly growth of c% • Part of Association T in N markets incl. Country 1, Country 2, Country 3 and Country 4 • Entered into the top R retailers in India at rank V for April 20--Source: ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 8
  9. 9. Company 1 Analysis of Posts • On social forums, users have shown displeasure on spamming messages (SMSes and emails) from Company 1, extra money charged (hidden charges) by the service provider, poor customer support • Company 1 had complaints registered against it on grievance forums that were related to error occurrence during online transactions, lack of co-ordination between vendor and Company 1, non-receival of vouchers, etc. LE • Positive comments were about premium deals at affordable prices, huge discounts and wide variety of services Negatives MP • “I think Indias biggest spammer is Company 1” c% Positives • “I have discovered, when it comes to quality of SA a% • “I was told their were no hidden charges, but deals, timeliness and freshness of site, Company they charged me extra at the outlet” 1 is miles ahead of the rest“ • “The offer expiry date were different on the b% • “Company 1 gives me freedom to buy premium coupons front page and in the ‘Offer Details’” stuff at affordavble prices :-))” • “I did an online payment through Company 1 via • “Company 1 becomes my 3rd tab” net banking, my card was charged twice but I Positive • “Trust me.. Company 1 has some really exciting didn’t receive my coupon” Negative deals ” Neutral Reward Programs on Networking Sites • Users are rewarded INR D worth movie ticket vouchers for every E referrals (Users have to post a unique link available from Company 1 on F1 and T1, other message boards) • Users, who re-tweets (comments) on deals on T1 are rewarded with deal vouchersSource: ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 9
  10. 10. Thank you for the attentionThe Online Group Buying – India report is part of Business Services Industry Series.For more detailed information or customized research requirements please contact:Gagan Uppal Gaurav KumarPhone: +91 22 4098 7530 Phone: +91 33 4064 6214E-Mail: gagan.uppal@netscribes.com E-Mail: gaurav.kumar@netscribes.comResearch on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quickinsights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment &business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a truevalue proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growthobjectives.Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India,Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is thesole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 10
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