Daily deal sites spurring online business growth
Remains a driving agent of the surge in ecommerce, says Brafton.
Daily deal websites are growing on a global scale. The countries in Europe, America, Australia, Middle East, Asia, and other regions boast of at least one or two online portals providing group buyers with discounts on a variety of goods and services.
The online group buying is becoming a major cause of growth of online retail industry.
Though there are numerous stimulants of growth, yet daily deal sites remain a driving agent behind the surge in the volume and value of ecommerce, notes Brafton in its latest report, citing comprehensive consumer survey conducted by E-market.
Ecommerce is expected to touch USD42.5 billion by June-end, according to the online news agency headquartered in Boston. It further says online businesses generated USD41.5 billion in the previous quarter.
Daily deal websites are leveraging supports from the inflation-hit consumers in US by offering them low-priced products. Looking for bargains or price-cuts, the buyers obviously find such websites well-built shield against the wave of price hikes.
Group buying business model has proved effective to bring down prices of goods and services up to 90 per cent. It thins out prices of foods, electronic items, health and beauty services, etc. Almost all major US boroughs and cities including Washington, New York City, Boston, Houston, Austin, and San Francisco have welcomed innovative method of cutting prices driven by group buying.
Therefore, sales of group buying sites recorded a growth of 70 per cent in 2010 as compared to 60 per cent registered in the preceding year.
Due to the significant growth of online retail industry and surge in the online traffic, retailers seem to prioritize internet in their advertising strategies. Understandably, online advertising has a distinct advantage of multimedia promotion. Texts, visuals, and graphics can be harnessed simultaneously to create appeals in the online ads. It is worthwhile to mention that online advertising revenue is escalating substantially year on year, and registered a 15 per cent growth to USD26 billion in 2010.
Daily online deals have still a long way to go as a large number of customers are not availing discounts, bargains, special offers begotten by the online group buying. The group buying portals are expanding their operational territories to spread out local deals. "We've just scratched the surface. People spend 80 percent of their disposable income within two miles of the house. And that's the space we're playing in," Andrew Mason, chief executive officer of Groupon, the behemoth of group buying industry, told CBS News recently.