Tuangou: Online Group Buying

It Takes Two (Or More) to Tuangou The Rise and Fall and Rise of Online Group Buying

Tuangou Roughly “group buying” or “store mobbing,” tuangou is a shopping method that originated in China. People would swarm a store all at once and haggle for a group discount on a particular item.

But people quickly realized that it was a lot less painful to contact other potential buyers and organize massive group buys online.

In theory, online group buying is simple: ✦ Start a group dedicated to a speciﬁc product and set a target price. ✦ Alert your network and encourage them to add in to your group. The more people join, the lower the ﬁnal price. ✦ The group closes and vendors bid on the sale; lowest bid wins. The group is happy because they’ve just gotten a substantial discount, and the vendor is happy because they’ve just sold a lot of product.

Of course, this isn’t the ﬁrst time people have tried to arrange deals on the web. Sites like Mercata and Mobshop started in the 90’s but fell victim to the dot-com bubble of 2001. Ouch. But everyone deserves a second chance, right?

Why It Failed • Insigniﬁcant savings: better deals could be found on other sites. • Delayed gratiﬁcation: buying groups could take days or weeks to form before they had enough members to make a purchase. • Unfamiliarity: people had yet to develop social networks online.

Why This Time It Just Might Work • Familiarity: social networks are common and people are more willing to join impromptu groups online. • Immediate feedback: with new tools like texting, Facebook, and Twitter, people can spread the word to friends much faster and groups can grow quickly. • Better savings: with more people joining groups, they’ll be able to bargain for larger discounts.

Since online group buying is still in its experimental phase, companies are trying out different formats. Pikaba and SalesScoop, for example, have designated sites.

Twangu has no ofﬁcial website, just a Facebook app. Most companies also have a Twitter account.

Different Sites, Different Strategies Sale Timeframe 24 hours 5 days Unlimited # of Sales Occurring at Any 1 product or brand Unlimited Unlimited Given Time Company Initially acts as Invites vendors to Involvement in broker, will evolve bid and manages No Final Sale over time payment 10

Groupon is a variation on tuangou in that the discount is already set, assuming that enough people participate in each round. These “group coupons” are usually for local restaurants and services, not products.

And if you like buying online with friends (and you live abroad), you’ll love the spree!

What’s a spree? It’s another form of online group shopping that’s very popular in Singapore. Interested buyers combine their orders from one retailer to avoid using a credit card (which they often don’t have) and to save on shipping fees. Sprees were originally organized on LiveJournal, but independent websites are becoming more common.

Let Your Fingers Do the Shopping Spree organizers select an online store, determine a batch limit (often around $200) or cut-off date, and collect orders in the comments section. See any patterns in the most popular brands?

Don’t Stop Believing Trust is essential to a sprees success, as spree-ers pay the organizer in advance, either by an online or ATM deposit. Once the batch has closed and all the money has been received, the organizer places the order.

Ship and Save Items are sent to an American address provided by a shipping service like VPost. VPost consolidates the orders and uses bulk mailing to save on international shipping.

Warning: Sprees May Be Habit-Forming The organizer arranges for pick-up or mails out the individual orders, and participants review the organizer online. Let the next spree begin!

In conclusion Although there are still some kinks to work out, the rise of social networks will make online group buying increasingly popular and efﬁcient.

http://www.casaluci.com	795
http://socialcommercetoday.com	794
http://www.slideshare.net	64
http://www.picasreport.it	46
http://webgear.mine.nu	27
http://translate.googleusercontent.com	19
http://webcache.googleusercontent.com	2
http://fanyi.youdao.com	1
http://www.lmodules.com	1
http://translate.yandex.net	1

Tuangou: Online Group Buying

by Paula C on Aug 03, 2009

Accessibility

Categories

Tags

Upload Details

Usage Rights

10 Embeds 1,750

Statistics

Tuangou: Online Group Buying — Presentation Transcript