SPACING FOR BANNER / COMPANY LOGOSPACING FOR BANNER / COMPANY LOGO

Group Purchasing / Collective BuyingCase Study

Agenda

• The Phenomenon • The Business Model• Considerations• Shortlisted site

SPACING FOR BANNER / COMPANY LOGOSPACING FOR BANNER / COMPANY LOGO

The PhenomenonA Brief Introduction

• Group purchasing sites o leverage the power of collective

bargainingo provide incredible local deals

that offer huge savings for consumers

o promise spectacular sales numbers to participating merchants.

• Offer short-term daily deals with more than 50% off and therefore the deal gets sold out within short period of time.

• Over 10 websites available in Singapore

SPACING FOR BANNER / COMPANY LOGOSPACING FOR BANNER / COMPANY LOGO

Sample Deals

SPACING FOR BANNER / COMPANY LOGOSPACING FOR BANNER / COMPANY LOGO

2. Site promote deals via its marketing channels

1. Site negotiates deal and commission with merchant

3. Deal reaches mass market

4. Customers purchase

Site pays merchant as redemption begins

Customer redeems at Merchant

The Business ModelA form of Re-intermediation

SPACING FOR BANNER / COMPANY LOGOSPACING FOR BANNER / COMPANY LOGO

The Business ModelA form of Re-intermediation

Benefits to Merchants

• Guaranteed revenue and large number of new customerso If the minimum number of customers is not reached, the deal will not take

place• High brand exposure through various marketing channels and own databases

o Save NTUC Club’s own advertising dollar by leveraging on their existing marketing programmes

• Potential for viral marketing through sharing on social media o The site infrastructure allows easy access of sharing to various social media

such as Facebook, Twitter, and so on • Acquisition of new customer’s database from the deal’s participants

SPACING FOR BANNER / COMPANY LOGOSPACING FOR BANNER / COMPANY LOGO

Considerations

Pros Cons

• Short-term irresistible deal ensures purchase (in group) that can be redeemed at various periods later (esp. off peak periods)

• Advertising budget is substituted by product cost

• Good to find out the response rate

• Garner new customer’s base

• Might lower product value and cannibalise existing offers to members

• Little or no loyalty from the customers who purchased via such deal sites