Tuangou
Encyclopedia
Tuángòu which loosely translates as team buying or group buying (also known as store mobbing), is a recently developed shopping strategy originating in the People's Republic of China
. Several people - sometimes friends, but possibly strangers connected over the internet
- agree to approach a vendor of a specific product in order to haggle with the proprietor as a group in order to get discounts. The entire group agrees to purchase the same item. The shoppers benefit by paying less, and the business benefits by selling multiple items at once.
media, such as msn.com
, profiling the tuangou buying process. The popularity of the strategy in China is often attributed to the Chinese tradition of bargaining for the purchase of goods of all types. Tuangou buying also ameliorates a traditional distrust of goods purchased from unknown sellers as individual members of the buying group can vouch for a particular seller's quality to the rest of the group.
Group buys are a variation of tuangou buying that also occurs in China, in which an item must be bought in a minimum quantity or dollar
amount, 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, tuangou 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 usually happen when dealing with industrial items, such as single-board computer
s. However, recently group buying is spreading to the consumer space as well, leaders such as MeiTuan, LaShou in Beijing, Twangoo, FunShare
- 享樂網 in Hong Kong, are quickly gaining acceptance. There are more than 800 tuangou websites in China
.
English-language group-buying platforms are also becoming popular. In 2010, the lifestyle magazine City Weekend
launched a tuangou service for expats living in China, FlashBuy. Other tuangou offering deals in English include Tuanpin, EnjoyMeiTian, GetGoGive.
Group buys are often organized by like-minded people through Internet forums. There have also been recent attempts at creating more focused online forums such as GroupBuyCenter.com. and Tippr.com The vast majority of the users tend to focus on after market autoparts and have now also started to leverage the group buying model for purposes of buying other consumer durables.
and North America
. While the original strategy was self organized and executed, most of the group buying in this part of the world is done through online intermediaries. Interested buyers are, most often, asked for credit card details, which will be charged only when a required number of buyers registers. Almost without an exception, intermediaries charge vendors a percentage fee in the range of up to 50% of the total value of the whole deal. Due to such a business model, group buying remains limited to the physical services sector, and is not seeing growth as the original strategy in the People's Republic of China
. Nevertheless, intermediaries with fairly identical business models are appearing daily, especially across the United Kingdom
and Germany
.
The most notable characteristic of all those intermediaries is the selected deals' orientation towards local markets, bound to cities and towns. Leaders include Groupon
, which has 79% of the market share, LivingSocial
(8% share) and BuyWithMe
(3% share)
In 2010, several new business models for group buying have been proposed, emerging from the overall popularization of micropayments. After the offer's deadline, buyers make direct purchases from the vendors' web sites, achieving higher mutual benefits. The most prominent company in this area is Next Jump
, which handles a line called 'Overwhelming Offers', offered through many loyalty programs, including Borders
Rewards, MasterCard
Marketplace, and their own website. This method does not charge percentage fees, but uses reservations as pledges of interest for after-deadline purchases.
and North America
, group buying websites such as Twangoo South Africa, Eishcoupon, Justhenga and Wicount have recently launched in the South African market. All adhere to the group buying business model, although few stick to the original 50%–90% discount. Deal aggregators like AllDeals are also appearing in the South African market. These websites distribute deal updates to consumers based on the user's location.
as an emerging market has yet to see popularization of new purchasing models such as group buying. First intermediaries appeared recently in Brazil
with slightly different business models than those proposed in Europe. Notably, the difference is in the way volume discount is achieved, as a post-purchase rebate instead of an instant discount, allowing for an immediate buyer's purchase. Major criticism for such model is in the lack of aggregation and unfit differentiation between buyers - those that wish to purchase immediately at any price and those that are willing to sacrifice time for discounts, eventually costing the vendor potential profits.
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
. Several people - sometimes friends, but possibly strangers connected over the internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
- agree to approach a vendor of a specific product in order to haggle with the proprietor as a group in order to get discounts. The entire group agrees to purchase the same item. The shoppers benefit by paying less, and the business benefits by selling multiple items at once.
In China
The tuangou phenomenon has been most successful in mainland China, where buyers have leveraged the power of group buying, which has led to English languageEnglish language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
media, such as msn.com
MSN
MSN is a collection of Internet sites and services provided by Microsoft. The Microsoft Network debuted as an online service and Internet service provider on August 24, 1995, to coincide with the release of the Windows 95 operating system.The range of services offered by MSN has changed since its...
, profiling the tuangou buying process. The popularity of the strategy in China is often attributed to the Chinese tradition of bargaining for the purchase of goods of all types. Tuangou buying also ameliorates a traditional distrust of goods purchased from unknown sellers as individual members of the buying group can vouch for a particular seller's quality to the rest of the group.
Group buys are a variation of tuangou buying that also occurs in China, in which an item must be bought in a minimum quantity or dollar
Dollar
The dollar is the name of the official currency of many countries, including Australia, Belize, Canada, Ecuador, El Salvador, Hong Kong, New Zealand, Singapore, Taiwan, and the United States.-Etymology:...
amount, 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, tuangou 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 usually happen when dealing with industrial items, such as single-board computer
Single-board computer
A single-board computer is a complete computer built on a single circuit board, with microprocessor, memory, input/output and other features required of a functional computer. Unlike a typical personal computer, an SBC may not include slots into which accessory cards may be plugged...
s. However, recently group buying is spreading to the consumer space as well, leaders such as MeiTuan, LaShou in Beijing, Twangoo, FunShare
FunShare
FunShare.com is a brand new eCommerce company focusing on group guying and started/HQ in Hong Kong.-Overview of Group Buying:Hong Kong, just like the US, went through a bubble burst in the internet space back in 2000...
- 享樂網 in Hong Kong, are quickly gaining acceptance. There are more than 800 tuangou websites in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
.
English-language group-buying platforms are also becoming popular. In 2010, the lifestyle magazine City Weekend
City Weekend
City Weekend is a free, bi-weekly entertainment event and venue listing magazine based out of China.. Its on-line edition is both autonomous and complimentary to the print magazine - City Weekend is "reader-powered" and sources most of its information directly from the expat community.City Weekend...
launched a tuangou service for expats living in China, FlashBuy. Other tuangou offering deals in English include Tuanpin, EnjoyMeiTian, GetGoGive.
Group buys are often organized by like-minded people through Internet forums. There have also been recent attempts at creating more focused online forums such as GroupBuyCenter.com. and Tippr.com The vast majority of the users tend to focus on after market autoparts and have now also started to leverage the group buying model for purposes of buying other consumer durables.
In Europe and North America
Although initially a Chinese concept, recent developments led to a wide increase of appearances of similar phenomena, in EuropeEurope
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
and North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
. While the original strategy was self organized and executed, most of the group buying in this part of the world is done through online intermediaries. Interested buyers are, most often, asked for credit card details, which will be charged only when a required number of buyers registers. Almost without an exception, intermediaries charge vendors a percentage fee in the range of up to 50% of the total value of the whole deal. Due to such a business model, group buying remains limited to the physical services sector, and is not seeing growth as the original strategy in the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
. Nevertheless, intermediaries with fairly identical business models are appearing daily, especially across the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
.
The most notable characteristic of all those intermediaries is the selected deals' orientation towards local markets, bound to cities and towns. Leaders include Groupon
Groupon
Groupon is a deal-of-the-day website that features discounted gift certificates usable at local or national companies. Groupon was launched in November 2008, the first market for Groupon was Chicago, followed soon thereafter by Boston, New York City, and Toronto...
, which has 79% of the market share, LivingSocial
LivingSocial
-Business model:LivingSocial offers a new deal each day to its members who subscribe via email. Once a deal has been purchased, members are e-mailed their redemption vouchers the following business day, around 5 a.m. local time...
(8% share) and BuyWithMe
BuyWithMe
BuyWithMe is a group buying website allowing consumers to leverage group buying power to get discounts with local merchants. The company is headquartered in New York City. Funding was obtained via a group of angel investors. BuyWithMe's first market was Boston, where restaurants including UFood...
(3% share)
In 2010, several new business models for group buying have been proposed, emerging from the overall popularization of micropayments. After the offer's deadline, buyers make direct purchases from the vendors' web sites, achieving higher mutual benefits. The most prominent company in this area is Next Jump
Next Jump
Next Jump is an e-commerce company. The company handles loyalty programs for Dell, AARP, Borders and Hilton Hotel.Headquartered in New York City, the company has over 28,000 merchant partners, both retailers and manufacturers...
, which handles a line called 'Overwhelming Offers', offered through many loyalty programs, including Borders
Borders Group
Borders Group, Inc. was an international book and music retailer based in Ann Arbor, Michigan. The company employed approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores....
Rewards, MasterCard
MasterCard
Mastercard Incorporated or MasterCard Worldwide is an American multinational financial services corporation with its headquarters in the MasterCard International Global Headquarters, Purchase, Harrison, New York, United States...
Marketplace, and their own website. This method does not charge percentage fees, but uses reservations as pledges of interest for after-deadline purchases.
In South Africa
Following the success of the intermediary group buying model adopted in EuropeEurope
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
and North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
, group buying websites such as Twangoo South Africa, Eishcoupon, Justhenga and Wicount have recently launched in the South African market. All adhere to the group buying business model, although few stick to the original 50%–90% discount. Deal aggregators like AllDeals are also appearing in the South African market. These websites distribute deal updates to consumers based on the user's location.
In South America
South AmericaSouth America
South America is a continent situated in the Western Hemisphere, mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere. The continent is also considered a subcontinent of the Americas. It is bordered on the west by the Pacific Ocean and on the north and east...
as an emerging market has yet to see popularization of new purchasing models such as group buying. First intermediaries appeared recently in Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
with slightly different business models than those proposed in Europe. Notably, the difference is in the way volume discount is achieved, as a post-purchase rebate instead of an instant discount, allowing for an immediate buyer's purchase. Major criticism for such model is in the lack of aggregation and unfit differentiation between buyers - those that wish to purchase immediately at any price and those that are willing to sacrifice time for discounts, eventually costing the vendor potential profits.