Group Buying

Group Buying offers products and services at discounted prices when there is a minimum number of buyers would make the offered purchase. Only if there are enough members sign up for the promotion make it become valid to encourage sharing of individual deals. If the minimum number is not met, the deal will considered as fail and cannot proceed. After completing the deal, buyers usually print out the voucher to claim for their discount from retailer.

Part A - History of group buying

The origins of group buying can be traced to China in which tuángòu, meaning a group of people were buying the same products, is used to get reduced prices from retailer.

In 2000, Paul Allen started an e-commerce called Mercata. The website sells high end electronic products to online shoppers. Individual buyers would sign up en-masse to buy the same product and the price of the product would fall as more people signed up to buy it. However, the website could not compete with websites like Amazon.com so it was shut down in 2001.

Group buying before 2009 usually are the buying of industrial products for wholesale market especially popular in China.

As the seller will allow purchase only when a certain amount of same item is being bought, since a single buyer suppose would not need repeated items or buying in bulk, therefore group buy usually involve a group of people. In the past, there were shoppers organized this kind of deal through finding and grouping buyers from internet forum.

Recently, group buying has been taken online in numerous forms

Modern day online group buys are a variation of the tuángòu buying that occurs in China.[4][5] Under tuángòu, an item must be bought in a minimum quantity or dollaramount, otherwise the seller will not allow the purchase. Since individuals typically do not need multiples of one item or do not have the resources to buy in bulk, group buys allow people to invite others to purchase in bulk jointly. These group buys often result in better prices for the individual buyers or ensure that a scarce or obscure item is available for sale. Group buys were, in the past, often organized by like-minded online shoppers through Internet forums. Now these shoppers have also started to leverage the group buying model for purposes of buying other consumer durables. Group buying sites are back in demand as small businesses look for ways to promote their products to budget-conscious consumers in a weak global economy.[6] Group buying is also used for purchasing real estate properties.

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