E-commerce strategies of group buying websites : case study: Groupon Inc.

Abstract

Group buying business model has an increasingly high growth rate, surpassing any model in history. This business is fundamentally the brokerage between businesses and customers and receives commission fees from the transaction. However, the model has been criticized by consumers and local businesses for being unprofitable and unsustainable. Thus, the target of this thesis is to find a way to improve strategies of group buying websites based on online consumers’ behavior.

In order to achieve the goal, the 5C analysis of websites and the application of value disciplines are fully studied. The paper has used qualitative method with the support of quantitative data from 35 respondents who participated in a structured questionnaire. Additionally, the theoretical evidences are obtained via published and electronic sources of journal articles, books, websites and well-known blog.

Upon completion, the research has found that online consumers are majorly price-sensitive as of deal-seekers, and prone to be affected by information quality and user interface of the website. Moreover, the study has also shown the possibility of mining data from the purchasing patterns of the customer.

Finally, the data was analyzed, and the conclusion was drawn that consumer behaviors and purchasing patterns are to be used to meet the customer demands and needs. As a broker, the group buying websites have to please both the local merchants and the end customers. Thus, by utilizing the data given above combined with the in-hand resources, group buying websites can opt for suitable strategies. The case example of Groupon has shown valuable insights of how a group buying websites can tackle the problem.