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Local Group Buying Market Remains Fiercely Competed

Group buying market remain competitive

A recent report from Telsyte highlights how the Australian group buying market remains competitive, with nine companies taking 95% of all revenue.

Market research company, Telsyte, has released a report on the Australian group buying industry, revealing that the field remains fiercely competitive.

Following the sudden disruption that group buying caused within the retail landscape, media and consumer fallout began to sow doubts for the long-term viability of the model. While start-ups continue to try their luck in breaking into the market, the rate of entry has slowed as marketshare has become dominated by a few large businesses.

The Telsyte report demonstrates just how fiercely competed this market is, with the largest group buying sites continuing to jostle for position. Whether the specifics of the report are accurate for each corresponding businesses (i.e. that these figures are real) is largely immaterial. Rather, for a business model that relies so heavily on marketing, this report is surely more indicative of a lack of breathing room in this sector.

That isn’t to say group buying is about to flatline any time soon. Telsyte reports the industry generated $117 million in revenue for the third financial quarter of 2012, an improvement on previous figures that indicates a newfound stabilisation. This, Telsyte reports, is largely due to the success of travel and accommodation deals on these websites, rather than a turn around in general retail confidence.

“Consumers have continued to purchase products and services through group buying sites and the industry is expected to sustain year-on-year growth,” says Telsyte Senior Research Manager Sam Yip. The report indicates growth of seven percent year-on-year is expected, with the industry tipped to reach $530 million in revenue this year.

The top nine group buying websites are also shown to generate 95 percent of this revenue, highlighting the crowded nature of the industry. Groupon, Scoopon, LivingSocial, Cudo, Spreets, Deals.com.au, Ourdeal, Ouffer and GrabOne are listed as the highest performing in order, with Groupon claiming a 26 percent marketshare.

 

Campbell Phillips

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Campbell currently serves as Editor for Power Retail. He has a background in science communication and a long history in retail. Campbell has a keen interest in emerging technologies and their impact in the world of media and online retail. Campbell is an indoor sports junkie, to the point of playing in a local dodgeball competition once a week, “just for kicks”. Follow Campbell on Twitter, Google+ or connect with him on LinkedIn.

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