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Group Buying in China

Since the late 1990s, some Chinese consumers have become enthusiastic about group purchasing to enjoy discounted prices. Initially, it was companies that combined all subsidiaries for bulk purchases to cut costs; its later development to the individual level can be attributed to the role of the Internet as a convenient communication platform.

Group buying, or collective procurement, according to surveys, this new form of consumption is gradually gaining favor among residents in large cities like Beijing and Shanghai. An increasing number of citizens are joining the ranks of group buyers when purchasing homes or cars, organizing through the Internet or other channels to collectively bargain with merchants to protect their interests.

Currently, the scope of group-buying products has become very extensive, not only penetrating into goods such as cars, home appliances, mobile phones, computers, furniture, building materials, but also expanding into service sectors such as health check-ups, insurance, tourism, education and training, beauty, fitness, and leisure.

Chinese consumers have always enjoyed haggling. In Internet chat rooms, some like-minded consumers devise plans to purchase large quantities of home appliances, furniture, food, and even cars, then go en masse to merchants to haggle for greater discounts.

In China, successfully bargaining down a price is considered an accomplishment. Even when browsing in department stores, people often treat the tag price as a starting point for significant negotiation. The Chinese retail industry is undergoing unprecedented changes, and this practice is becoming increasingly popular. Nowadays, stores are filled with various brand-name items, providing consumers with countless choices. Increasing competition forces merchants to cater more to consumer demands.

In the late 1990s, Europe and America also saw the emergence of websites that arranged discount services for group-buying consumers. However, due to factors such as the long time required to complete transactions and other complexities, consumers found it difficult to develop interest in these sites, leading to the eventual closure of many of them.

Market observers believe that the rising demand, intensifying market competition, evolving management concepts, and awakening rights protection awareness provide opportunities for the emergence of this form of consumption.

The fundamental reason for the appearance of group buying lies in the gaps present in pre-sales services for many commodities. From the moment a consumer conceives the idea of making a purchase, to deciding to buy, and finally selecting a car or a house, there is a need for preparation over a period of time and many questions require answers. Regrettably, no current institution or merchant in China can provide comprehensive answers.

A popular phrase now is "group buying is power." There are too many issues involved when consumers purchase goods. As individuals, consumers almost cannot understand all the problems by themselves. Group buying can leverage collective wisdom and further rely on specialists...