Independent media analyst firm Telsyte has found 95 percent of businesses that participate in group buying deals are satisfied with their promotions.

With the industry predicted to be worth $400 million by the end of the year, Telsyte’s ‘Online Group Buying Merchant Study 2011’ found that 85 percent of merchants that have run a group buying promotion plan to do so again.

But the industry and businesses that participate are still testing the waters. “Most businesses, despite indicating that they will run another deal, are considering using a different site,” says Sam Yip, senior research manager at Telsyte.

John Butterworth, CEO of the Australian Interactive Media Association, is positive about an industry that grew a staggering 72 percent last quarter, saying, “Group buying is clearly a major hit with Australian consumers and the dramatic growth in the industry demonstrates how digital channels and the rise of social commerce are underpinning significant shifts in consumer behaviour.”

This is certainly a different tone about an industry that has experienced rapid growth, its fair share of controversy, and is still grappling with the ‘fad’ label. But, ultimately, the finding that merchants are happy with the way group buying promotions are going may be irrelevant if reports that consumers are not happy are true.

Peter Roper
BY Peter Roper ON 4 October 2011
Editor of Marketing Magazine and
  • wordmistress

    Group buying (aka daily deals) is still relatively in its infancy in Australia so there are bound to be highs and lows as the concept evolves. Anything new will naturally win fans in some corners and alienate consumers in others but as it grows, the extremes will level out.

    Consumers will always seek more for less. The trick is for businesses to cater to those desires whilst still achieving success. Unfortunately, businesses who view daily deals as the marketing opportunities they are tend to be miniscule in number. The downside of the concept is that group buying companies do not adequately educate the businesses running the deals so that they can turn deal-seekers into loyal return customers. A quick buck seems to be the prime motivator, especially with chunky upfront sums as the dangled carrot.

    I look forward to a time when daily deals work equitably for the three parties: the deal companies, the deal providing businesses and the customers.