Bulk Buying, a New Group Craze!

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?I am an insurance professional and have a hectic lifestyle. One day a friend of mine told me about some online deal she has registered for and wanted me to help her get it by me signing up for the same. I didn?t ask much and just followed her instructions. I was supposed to make a PayPal payment of about Dh100 and that was it. She said I wouldn?t lose any money and I just went with the flow.”

“The following day, I received an email stating that the deal got tipped and a receipt of my payment, with which I got a Moroccan bath and a head massage. That was a real Wow, I mean a luxurious body treatment and relaxing massage for 100 bucks?, Maliha says, as she recounts her first experience with one of the group buying websites in Abu Dhabi.

Group buying websites; elicit deep discounts (some promise up to 90 percent) on lifestyle services, including restaurants, movie tickets, salons and holidays; by committing a minimum number of customers. This is gaining immense popularity among Internet users and local merchants in the UAE.

?I live on these discounted vouchers?, 20 year old Fatima, an intern in the capital says. ?Before I discovered these websites, it was just emails and Facebook for me. But now every morning I wake up with an excitement to find out what new deals are up for the day. In one of the websites, I get (loyalty) points for making purchases. So if there is a bargain of the sorts I like, I register for it before the deal tips so that I get extra points (registering for the discounted price after the deal tips rewards one with few loyalty points; as the website rule cites).

These websites feature daily deals in each emirate for an unbelievable price. The deals are usually great hotels to top notch hair salons, luxury spas and other experiences. People registered with these websites receive daily alerts of the new bargains available. If a required number of people (varies for each deal) registers interest in the discounted offer, the deal gets activated. In some cases, when the required number of people don?t sign up for a deal, the offer dies and those who registered interest are not charged any money.

?We had posted an offer on body scrub and massage. The response we got was amazing. Some first time customers who came with these vouchers went back very happy. And many of them now are regular customers with us?, commented Ms. A (who wishes to remain unnamed) working with Zari Spa, Abu Dhabi. Entrepreneurs are actively making space for group buying in their sales strategy despite the margins they have to part with for discounts. It is the sheer ability of these websites to ensure footfalls that has made this new generation of online business a hit among local merchants in the UAE.

?We had offered something close to 60 percent off on the service. That is huge, but compared to the new customers we got and the subsequent business generated from them – it has worked well for us?, Ms. A added.

This (online) group buying market is fragmented among hundreds of smaller players worldwide. This business model has little barriers to entry and is gaining attention from shoppers and businesses worldwide. The concept of group buying was launched in UAE last year and is a huge hit with customers and business entities.

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