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.

1. Online Group Buying – India
December 2010

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
spending
Challenges 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 players
Competition
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. •Market Overview
•Drivers & Challenges
•Trends
•Investments
•Competition
•Social Media Analysis
ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 3

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 India
Source: X
ONLINE GROUP BUYING MARKET IN INDIA 2010.PPT 4

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. 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
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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 website
Source:
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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:
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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 India's 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 vouchers
Source:
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10. Thank you for the attention
The Online Group Buying – India report is part of Business Services Industry Series.
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