New Delhi : Bangalore based techie Arvind never thought he would be able to enjoy photography classes for just Rs 149/-. Arvind bought this deal through Snapdeal.com. Says Arvind “I just stumbled upon this website by chance and now I am a regular visitor. I end up saving upto Rs 1500/- per month through Snapdeal ” Arvind is not alone in saving though. Snapdeal has saved over Rs 2 crores for its customers since it started operations. Jasper Infotech, the parent company of SnapDeal (www.snapdeal.com), India’s largest Daily deals website with a 65% transactional market share, today released its Online Group Buying Industry Trend report. The report focuses on the recent ‘Deals Buying trend’ online, witnessed among various Age groups, Gender, Geographical locations and Categories.

According to Jasper, Group Buying has given a different dimension to the e-commerce industry in India. The industry has experienced a massive growth from selling around 100 vouchers a day in the beginning to selling more than a few thousand vouchers on an average currently. This growth is likely to grow at a faster rate in the coming months, if current trends are any indication. The Indian retail services market is valued at $100 billion and the goal of the group buying industry is to migrate some of these spends from offline to online. If we assume 1% of these spends migrate, we are looking at a $1-billion market in the next decade.

Going by the transactional trends observed on various websites, the Gender ratio distribution is likely to be slightly skewed towards Men at 55% and women at 45%, but in many cases men purchase the deals as gifts for women.

Another interesting observation is that the customers of these online group buying sites are usually young professionals. The age group is biased towards 18-25 years with around 58% of the customers in this bracket. The remaining 42% customers fall into the 25–40 year age bracket. The representation from the 40 – 60 year old is not very sizeable. But as the industry grows we can expect members of every age group adopting the group buying industry.

In terms of Geographical distribution, 80% of the business currently comes from Metros and Tier I cities. Bangalore has taken to group buying like a fish to water with more than 10 businesses in this industry operating in the city, and new players entering the market every passing week. Rest of the business comes in from tier II cities.

Within metros and big cities, another concern, is the geographic proximity of the service which is featured on the websites, to the relevant audience. A customer staying in Thane is left without a deal if the business featured is based in South Mumbai. One way that Snapdeal has addressed this concern is by going hyper-local in 3 cities. What this means is that the city is further sub-divided into zones to increase relevance to a wider audience. This is a trend anticipated across the industry going forward as it would make the deals more proximate and relevant for the big city consumer.

Food & Dining, Health & Beauty services & Weekend getaways are the sectors which are most sought after. Beauty services often see vouchers picked up in hundreds of numbers. Increasingly, a lot of new and unique services which are featured are also gaining acceptance among the customers of group buying sites. SnapDeal has seen its customers showing a lot of interest in deals ranging from dance classes to photography and pottery lessons.

In the western countries, Groupon, the largest group buying site globally has garnered such a following that people log on to the site to check the deal first thing in the morning. With Internet penetration in India still catching up, we still have a long way to go. This is where India’s mobile phone penetration can play a major role. The industry can be anticipated to shift to M-couponing and purchases through phone, however having a very large inventory of deals will be critical to make the service relevant for the dense and widely spread out mobile phone users.

The group buying space has seen a lot of action with respect to investments & consolidation already. Grabbon, a Bangalore based daily deals site was acquired by Snapdeal whereas Mumbai based WanaMo was acquired and renamed to Dealsandyou by Smile Interactive. Taggle has already received funding from Greylock Partners & Battery Ventures. Every month there are a couple of new entrants trying to make their mark in the industry, who now face an uphill task to scale up operations and brand visibility. We expect further consolidation, and foresee only 2-3 players maintaining critical mass and surviving in the coming year or so, which will be a healthy trend for the industry. The companies that thrive will be based on quality deals, strong merchant relations & seamless customer service. But rest assured this is a space that’s here to stay and get consumers deals on the things they have always wanted to do.