Australia set for group-buying surge

02 May 2011

SYDNEY: Consumers in Australia are set to rapidly increase their outlay on group-buying websites over the next five years, a new forecast has predicted.

Research firm IBISWorld estimates the revenues generated by operators in this category could reach A$377m ($412m; €279m; £247m) across 2010/11, rising from a "base of virtually nothing".

Such a turnover potentially represents a 1.8% share of the country's entire ecommerce market, valued at A$21.3bn.

Looking ahead to 2015/16, IBISWorld anticipates group-buying returns should exceed A$650m, taking 2.1% of all online retail sales, worth A$30.8bn.

"Offering three major selling propositions - group voucher discounts, clearance goods and travel for limited periods - this sector is now the fastest growing retail platform in Australia," said Rob Bryant, general manager, IBISWorld.

At present, the travel and accommodation segment contributes 29.3% of deals, standing at 29.2% regarding retail goods, 14% for beauty products, and 10.6% concerning out-of-home dining.

Leisure activities logged 8%, trailed by fashion's 8%, professional services' 3%, sport and fitness' 1.5%, and just 0.4% when discussing food.

Australia boasts more than a dozen relevant portals competing in this area, and leading players like Cudo, Spreets and Scoopon typically provide discounts hitting 60%.

Yahoo!7 paid A$40m for Spreets in January 2011, while Nine Entertainment owns Cudo, Ten Networks runs Our Deal, and Twitter has purchased Ozsale for A$14m.

Catchoftheday, one of the biggest sites, is expected to post revenues of A$110m in the current financial year, and these kinds of figures have attracted bricks and mortar chain Harvey Norman to enter the fray.

Data sourced from IBISWorld; additional content by Warc staff