Group Buying Complaints on the Rise
The group buying industry is booming across Australia, but suddenly, those 50 per cent off thongs aren’t feeling quite so comfortable and you can't get a customer service rep to call you back. Sound familiar?
According to the Sydney Morning Herald, group buying-related complaints have contributed to a 39 per cent increase in consumer complaints in NSW about online shopping. In Victoria, MyBusiness reported that Consumer Affairs Victoria (CAV) received nearly 530 complaints between January and October 2011. The SMH reported that, during the same time period, the Australian Competition and Consumer Commission received more than 4000 complaints related to online buying, resulting in a $3.8 million loss.
“The concept of group buying is brilliant, there is no doubt about that, and consumers can get some great deals,” Fair Trading Minister Anthony Roberts told the Sydney newspaper. “So when they are good they are great, but when they are bad, the sites are a disaster.”
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Based on the numbers, it may not be as bad as we think.
“We sell a million coupons a month as an industry,” Spreets’ founder Dean McEvoy told MyBusiness earlier this month. “The percentage of issues or complaints is quite small.”
Group buying is meant to be a positive experience, where consumers are introduced to new experiences, services and products at a discounted rate in the hope that they’ll return to the business as a full-paying customer later.
In November 2011, Australia became the first nation to launch a 'Group Buying Code of Conduct' in response to this booming industry. The code is aimed to set uniform benchmarks for websites offering these discounted products and services, and it protects consumers from low quality deals and sub-par customer service from some buying sites.
Considering how quickly the industry has grown over the past few years, protecting both sides – the dealer and the consumer – is crucial. According to reports released by Telsyte, the Australian group buying market was worth nearly $500 million in 2011 and is expected to reach $1 billion in value by 2015.
“Consumers love a bargain, and they love getting value for group buying. Over time, we’re going to see this model evolve as it moves into specific areas like travel,” Australian Direct Marketing Association (ADMA) chief executive Jodie Sangster told Smart Company last November. “So this code will allow companies that are already doing the right thing to continue to do so.”
Of course, not everyone is unhappy with their deal purchases - plenty of consumers have enriched their lives through newfound hobbies and activities, and according to Green China, group buying may be helping combat climate change. So long as we're mindful of who we're buying from, group buying will continue to thrive as a viable method of 'social shopping.'
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.