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Australia’s niche players in the field of group buying have been watching their bottom dollars in recent months. While prior forecasts had placed revenues for the sector at $600 million, drops in consumer spending have lowered that figure to $530 million.

News has been grim for nearly a year running, with tech analysts Telsyte reporting four consecutive quarterly drops for the once-thriving industry. As one might expect, the brunt has been hardest on the small-name players.

In the words of Telsyte Senior Research Manager Sam Yip, 50 percent of shares in Australia’s group buying sector are held by Groupon and Scoopon, while LivingSocial holds at third place with 14 percent.

Clamoring at the short end of the rope are Cudo, Spreets and OurDeal, which respectively cling for market shares of 12, 10 and 8 percent.

Further stats from Telsyte reveal that Q3 coupon numbers for 2012 dropped by nearly one million since the prior September. Still, coupons in general have risen in value, which can largely be attributed to product and travel sales.

Yip himself has spoken openly about the widening gulf between major and minor players in the group buying sector. The largest sites, he reveals, are making upwards of $13 million per month, which can largely be attributed to generous deals and strong campaigns.

Acknowledging how hard it has become for smaller players to compete, Yip says that group buying underdogs should spread their focus across interrelated markets, including flash sales, daily deals and even traditional merchandising.

One thing Yip does not advise is for players to simply exit the industry. Likening group buying to poker, the analyst notes that there are times to either fold or expose a deck of cards. In a field where investors are falling into lockstep with the big names, smaller players are unlikely prospects for buyouts.

Yip champions the recent, often lucrative model of tiered pricing, where deals offered at one price can be upgraded for slightly higher amounts.

Insisting that the sector is funneling down to a field of 10 principal sites, Yip claims that current market rates are likely to continue for years to come. Group buying, he notes, remains high on the list of online shopping choices amongst modern day consumers.

Pointing out the seasonal nature of sales spikes, Yip advises all players to harness the moment with special offers this holiday season. Black Friday, after all, is the busiest time of the year for online traffic – which makes it prime time for promotional deals.

In his final words of advice, Yip says that deals must always be offered with relevancy in mind. When sites promote fresh ideas, visitors are inspired to make repeated visits. Anything beyond 24 hours, he states, is too long, because a deal loses its appeal when it lacks an urgency factor.

Longer deals, Yip observes, are the product of companies with little in their pipelines.

 Source: StartupSmart

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Daily Deal Directory

Jason Campbell

Jason Campbell is a Junior Editor @ Daily Deal Media
DDM Reports
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