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Prashant \n Mahesh, The Economic Times\n <\/i><\/p>\n
Prashant \n Mahesh, The Economic Times
\n <\/i><\/p>\n
Mumbai, \n August 12, 2011
\n <\/i><\/p>\n
Be it a holiday package, dining at a star restaurant or getting \n a hair cut at a fancy salon, everyone wants a better deal (read \n huge discounts) these days. This has led to a mushrooming of internet \n sites that offers discounts on everything under the sun. There \n are 20-30 websites like snapdeal, taggle, sosasta, mydala, and \n so on, offering such deals to customers. "Consumers want \n to try new products and at the same time save money," says \n Anisha Singh, founder and CEO, mydala.com.<\/p>\n
The way it works <\/b><\/p>\n
Group-buying sites offer heavy discounts on a range of products \n and services that are in demand. This is how the economics works: \n Any organisation broadly has two kinds of costs – fixed and variable. \n In the case of a restaurant, for example, the fixed cost includes \n expenses on air conditioning and maintenance, salaries paid to \n staff, etc. The variable cost is that of food. Now, a new restaurant \n needs to popularise itself to attract new customers. It may have \n a 100-seat capacity, but there may be only 50-60 people, on an \n average, seated at the restaurant. As a marketing exercise to \n attract more customers, the restaurant gives promotional offers \n through websites. <\/p>\n
"Generally, a discount is given in such a way that the variable \n cost is covered, which, in the case of a restaurant, is food," \n says John Kuruvilla, founder and CEO, taggle.com. So if a meal \n at the restaurant costs 300, it is offered at a discounted rate \n of 150 to attract customers. This 150 covers the food cost. <\/p>\n
This creates a win-win situation for both the customer and the \n restaurant. A lower price attracts customers to the restaurant \n to try the service out, which they may otherwise not do. At the \n same time, it also gives business to the restaurant. The website, \n in turn, gets a commission for every customer who buys the deal. \n A customer who wants to buy a deal from a website is given a voucher \n after the payment is made. So when you buy a service for, say, \n 500, some websites insist that you pay the entire amount upfront. \n Some others may allow you to pay 100 for the voucher and pay the \n balance to the vendor when the service is provided. <\/p>\n
The typical group-buying site goes live when a minimum number \n of customers buy the deal. Generally, websites give a commitment \n to vendors to get a minimum number of customers. For example, \n for a dance class deal, the merchant may insist on at least five \n customers. Once the deal is put up and five customers buy it, \n the deal goes live (it is on the website). However, some websites \n do not go by this minimum commitment. Once the deals are uploaded, \n any number of customers can buy them. <\/p>\n
What’s on offer? <\/b><\/p>\n
Almost all these sites offer deals on restaurants, salons and \n spas, dental check-ups, car cleaning, pest-control services and \n so on. Among the products they offer are electronic items and \n gadgets. Discounts could vary depending on the brand and category. \n In some cases, the discounts may be as high as 80-90%. As these \n sites pick up, new and exciting services get added. <\/p>\n
[Article continued below…]<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"
Prashant Mahesh, The Economic Times Mumbai, August 12, 2011 Be it a holiday package, dining at a star restaurant or getting a hair cut at a fancy salon, everyone wants a better deal (read huge discounts) these days. This has led to a mushrooming of internet sites that offers discounts on everything under the sun. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-3022","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n