Leon Perera, Chief Executive Officer of Spire Research and Consulting, commented on the prospects for the group buying industry in an interview on Channel NewsAsia â€“ Singapore Tonight.
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21 September 2012
Channel NewsAsia â€“ Singapore Tonight
Singaporeâ€™s group buying industry faces challenges
Singaporeâ€™s group buying industry is now dealing with the challenges of industry maturation and lukewarm consumer popularity. Leon Perera, Chief Executive Officer of Spire Research and Consulting, commented on the prospects for the group buying industry in an interview on Channel NewsAsia â€“ Singapore Tonight.
Since 2010, Singaporeâ€™s group buying industry has witnessed tremendous growth with 72 Singapore-based websites offering bulk purchases. However, the industry is now facing slowing growth figures. According to Groupon, there has been a sharp fall in the number of companies offering bulk purchases in Singapore; with only 19 companies left in the market since 2010.
Perera mentioned that the group buying industry has experienced its share of â€śme-tooâ€ť companies. Many companies have mushroomed to imitate Grouponâ€™s business model. Thus, some consolidation is only natural. He added that the number of merchants in Singapore and the size of consumer demand â€ścannot sustain so many different companies essentially pursuing exactly identical business modelsâ€ť.
However, the scenario is not totally bleak. With the rise in internet traffic by 10 percent this year from 4 percent in 2011, the industry remains attractive. Perera highlighted that Singapore definitely has immense potential, as bulk discount deals would continue to attract some socio-economic segments due to income disparities. However, innovative strategies are needed for players to differentiate themselves and survive. Also, they need to ensure that there are no hidden costs and that the deals are user-friendly and offer value for money.
As such, the key to ensure growth is to generate more contact points with consumers. Perera opined that Grouponâ€™s move to introduce retail buying sites in Singapore would help to counter the fall in growth figures.