The Venture Intelligence Blog

Extract from The Economic Times article Group buying is typically a good strategy, be it for travel deals or buying consumer durables, as it can help you get discounts ranging from 5% to 25%. More recently, companies such as Groffer.com and Home Buyers Combine (HBC) have taken the lead in extending this principle to real estate. ...Why do developers offer such attractive deals to group buying firms when they are unwilling to do the same for standalone buyers even as a bait during a slump? It's simple. Group purchasing brings a ready, not to forget substantial, cash flow to the developer and simultaneously generates business without him having to advertise any kind of discount. It's similar to the set-up that developers share with speculators who generally buy in bulk. Such investors are able to get discounts of 30-40% since they come in at a stage when the project has not yet started and typically pay 50% of the property's value upfront and in cash. Group buying compan...

Group buying, local search engines and education are the new mantras of success on the Web, says a Businessworld article . Group buying sites offer deals at heavy discounts, getting mass volume for them. Though it is new to India, group buying has been growing in the US for some time. For instance, US website GroupOn started by offering 50-90 per cent discount. Some of the prominent group-buying websites in India are Mydala, Koovs, Snapdeal and Dealsforyou. For Mydala, discounts go up to 70 per cent. For instance, one merchant gave a 93 per cent discount for a tattoo. Undoubtedly, a great deal for the customers, but what does the merchant gain? Simple. He gets hundreds of customers in a matter of days. Verticals that have picked up a lot of traction are highly popular among the younger generation. Think restaurants, salons and recreation such as weekend getaways. “One weekend, we had a cruise package as a deal and it sold so much that we had to do multiple cruise bookings,” says Kunal ...

MediaNama, which recently had a roundup of online group buying services in India, has followed it up with an interview with Smile Interactive Group's Harish Bahl. Smile's joint venture firm Deals And You recently acquired group buying startup Wanamo. (This deal closely followed Battery Ventures and Grelock Ventures committing $8.75 million to another Indian group buying service, Taggle.) There’s a lot of VC interest in this space, and that has largely to do with the success of groupon globally; they want to put money behind a working model. If you look at it from an India perspective, it’s a model that is very well suited – there is value for merchants and buyers, and a great marketing platform for services segment in the SME space. Finally, this is performance based marketing, and the Internet consumer in India is a deal seeker. ...The bad news is that this model has very low entry barriers. The good news is that it’s a model that is hard to scale ...GroupOn works on around 5...