group buying", "social living", "daily deals", "mycitydeal" or "group deals" is a method that presents products and services on the Internet at significantly reduced prices, often discounted as much as 30% to 90% off the original price. For the discounted offer to be valid, a minimum number of buyers must buy the product or service being offered in a limited time period before the offer expires. Groupon represents the idea that sellers are willing to offer their products and services at reduced prices if they can sell more and attain new customers as a result. Groupon was launched in Chicagoin November 2008 as the "deal of the day" and remains at the forefront of the growing online deals industry. Groupon, sometimes misspelled “Groupone”, and otherwise known as "collective buying", "social buying", "", "social living", "daily deals", "mycitydeal" or "" is a method that presents products and services on the Internet at significantly reduced prices, often discounted as much as 30% to 90% off the original price. For the discounted offer to be valid, a minimum number of buyers must buy the product or service being offered in a limited time period before the offer expires. Groupon represents the idea that sellers are willing to offer their products and services at reduced prices if they can sell more and attain new customers as a result. Groupon was launched in Chicagoin November 2008 as the "deal of the day" and remains at the forefront of the growing online deals industry.

How does Groupon South Africa Work?

Group Buying has its historical origins in China, where team buying or tuángòu as it was then known, operated to secure discounted prices from retailers for a pool of customers willing to purchase the same item in a minimum quantity. In recent times, group buying websites feature a deal of the day, which is activated as soon as the required number of people agree to buy the product or service. Group buying websites negotiate deals with their local merchants and service providers and once the necessary conditions are met, buyers simply have to print the voucher and claim the discount at the retailer or online. Group buying offers competitive prices to individual buyers, guarantees the availability of scarce or obscure items and enables online shoppers to leverage the group buying model to prompt the sale of other consumer goods.

What is Groupon South Africa?

Up until January 2010, Groupon was mainly US based, but this quicly changed with Groupon launching a major acquisition campaign in aim of spreading into European markets ("City Deal" or "mycitydeal"), South American markets (Clan Descuendo) Japanese markets ("Qpod.jp"), Russian markets ("Darberry.ru"), Groupon South Africa, of course, and many more countries. This aggressive international expansion also led to South Africa through the acquisition of Twangoo in January 2011, which gave Groupon a South African presence. Today, Groupon South Africa is in almost every major city and each city offers it's local merchants a new marketing tool for their products and services. The Groupon South Africa cities include Groupon Johannesburg, Groupon Cape Town, Groupon Port Elizabeth, Groupon Pretoria and Groupon Durban.

What is the Groupon South Africa business model and how does Groupon make money

The way Groupon South Africa profits is very simple: for each coupon that is sold, they charge the merchant between 20%-50% of the deal being offered. Lets use an example: a restaurant wants to promote itself, so they approach Groupon (or Groupon South Africa approaches them) and offer to run a deal. The deal would be something like this: "Pay R100 and receive a full lunch meal at Dani's Pizza place in Sandton worth R200". The Customer would then pay R100 for the coupon, and get in exchange a meal worth R200 (so they would save 50%). The restaurant would get R50 and Groupon would get the remaining R50. So that's R50 per coupon. If Groupon then sells 200 coupons, for example, they would have made R10,000 for that deal (before taxes and expenses of course). Groupon usually has tens of deals a day running ( a few deals for each city) and each deal runs a couple of days or until the coupons run out. You can do the math from here…

Groupon’s (U.S.) company value reached well over $16 billion on its first day of trading on the NASDAQ stock exchange, however in a market with hundreds of competitors, and limited entry barriers, many question the sustainability of the busines smodel. Living Social is one of Groupon’s most strategic competititors offering the same daily deals with funding from Amazon.

Interested in great group buying deals just like those on Groupon South Africa? Click here: Dealafrica