Group Buying

by Claire Minnaar

Group buying has hit the South African market with an almost audible bang. It has created platforms on which groups of South African consumers are exposed to more great deals than ever before.

Basically, group buying is exemplified by a particular website that offers deals with great discounts. Usually, this is done on a daily basis and the discounts are generally of more than 40% the usual retail price. The provider of the discount (i.e. the service or product provider, not the website itself) will stipulate a minimum number of deals that need to be done before the discount applies, so that it is worthwhile for them. Once that number has been reached, all of the people that have purchased the item will be charged and their voucher sent to them via email. If the goal number is never reached, no one is charged and the deal becomes invalid.

This presents many advantages, including:

  • The deals ‘come to you’, so to speak, as they are emailed through or available on a regularly-updated website. You can peruse them, shop around, purchase and receive the vouchers while never leaving the comfort of your chair, home or office.
  • The customer cannot lose money, as they are only billed if the deal is valid and successful.
  • Bulk buying has always been a cheaper way to purchase goods and ensures that the provider gains more in terms of sales, exposure and money.
  • This makes potential consumers aware of companies, products and services of which they may not previously have been familiar. If they purchase the deal, they are able to visit (and, possibly, bring friends and family to) a shop or outlet to which they may not have gone (or even seen) due to its being out of their usual route.
  • The websites benefit from the support (since they get a cut of the profits) and respond to the growing demands of online consumers by adding to their diversity and supply.

This is not a local initiative, however. In fact, group buying is a major trend the world over, particularly in the United States of America. Its popularity has made it one of the fastest growing internet endeavours in the world.

Of course, there are some precautions and protective measures that need to be taken in the field of group buying, but these are mostly for the website and the service provider, as the consumer faces no known risks. However, these risks only force such industries to improve on a constant basis, ever watchful for more secure and productive ways to provide their customers with great deals.

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