Online group buying advantages and disadvantages

Online group buying is one mode of e-business, which takes advantages of internet.

Group buying obviously offers a large number of deals for both the merchants and consumers, who can benefit from each other as merchants can earn more from more customers at certain time and customers can enjoy a great discount.

The Boston Consulting Group has conducted a survey, showing a lukewarm 7 percent annual growth of Hong Kong’s Internet economy, consisting of online shopping, e-commerce, and investments in the Internet.

The group-buying website plays an important role as a “marketing channel” rather than a “sales channel”.

The advertisement fees from merchants are lower than spending HK$700,000 for a 30 seconds commercial slot on TV or HK$40,000 for a spread on a HK magazine.

It is predicted that HK consumer group-buying market is estimated to generate revenues of $60 to $70 million each year, with more than 80 players now offering daily deals in the market.

Group buying could help merchants to develop a consumer base quickly to integrate off-line resources.

While it has some disadvantages, such as the suppliers are reluctant to sell a broad range of products through group-shopping companies, so the options are limited

When participating online group buying, the payment time comes first and the service comes second, if the group buying can not gather enough buyers, the event will be cancelled and the funds will be sent to the consumers, sometime, it will may buyers depressed even refunded.

IBUonline is a B2B foreign trade platform, which has integrated services in foreign trade.

IBUonline also watches other e-business mode trend and development.
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