Will The Group Buying Model Work In South Africa?

Group Buying, or Tuangou, is a relatively new buying and marketing strategy originally from China. Offline, Tuangou usually involves several people who approach a vendor of a specific product in order to bargain as a group to get discounts. The entire group then agrees to purchase the same item and benefits by paying less. The business benefits by selling multiple items at once.

The global trend at the moment is providing the same concept online by linking up strangers interested in purchasing the same product/service to (usually) small local businesses who provide the product to each member of that group at a drastically discounted rate. The group buying service is usually a localised service in order to provide deals to locals of their target city/community and the process usually works in the following way:

Want today’s deal? Just click “Buy” before the sale expires. If the minimum number of people sign up for the offer by the time it ends, you’ll get a printable certificate in your inbox the next day you can use whenever you like. If not enough people join, no one gets the deal and you don’t get charged a cent.

Mashable’s Pete Cashmore wrote an interesting article for CNN in which he outlines the trend at the beginning of 2010. The trend has continued throughout 2010 with dozens of websites springing up following the hugely successful Groupon. This trend has also made it to South Africa with some local group buying websites who are already offering group buying deals (see below).

I personally believe this strategy provides a unique and inspired way for small businesses to market themselves and gain new customers. Do you believe this model will work in South Africa?

The two biggest Group Buying services in South Africa currently are WiCount and Twangoo. WiCount is currently only offering deals in Joburg, but Cape Town and Durban offerings are planned (Score! Use the following promo code on WiCount to get 20% off your first purchase: Mathew-gs). Twangoo covers Cape Town as well as Joburg, with plans to offer deals in most major South African cities. Justhenga and EishCoupon are two other group buying services in South Africa. Twangoo, however, definitely is my service of choice and I’ve already purchased a few of their incredible deals.

Check out the Twangoo video after the jump for an explanation of the service:

UPDATE:

Another South African tuangou service has hit the web: UbuntuDeal