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Australian group buying soars

From invisible to fly-speck in only 12 months

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The Australian group buying market is set to grow by 284 per cent in 2011, generating A$242m and capturing 0.1 per cent of Australia’s A$200bn retail market.

The forecast from research firm Telsyte says group-buying is the fastest growing in the online retail. The sector is in nascent development, with players launching last year and gaining traction in the last quarter.

The top four sites – Spreets (which was recently acquired for $40m by Yahoo!7), Scoopon, Jump On It, and Cudo – represent 79 per cent of the industry’s revenues, estimated at $63m in 2010. There are around 20 group buying sites operating in Australia with global leader Groupon landing locally this week operating as stardeals.com.au.

The sector employees over 350 people and is expected to more than double its headcount in 2011.

“The success of online group buying in Australia shows that Australians are becoming increasingly social in their shopping activities. Consumers are moving from a simplistic click-to-buy shopping cart experience to a more dynamic social way of buying online” Telsyte senior research manager Sam Yip says.

Telsyte claims that new growth will come from "hyper-local" offerings and players that target specific market areas such as health or food. Further growth will also stem from the development of mobile group buying applications.

The research also claims that group buying plays from the likes of Google and Facebook will further shake up the market.

Associated industries are also poised to leverage the growth, with agencies horning in for their cut by representing merchants in deal negations and analysis, while white-label software platforms providers will gain from local media publishers entering the group buying industry through partnership or acquisitions. ®

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