Tuangou

From Wikipedia, the free encyclopedia

Tuangou, (simplified Chinese: 团购; traditional Chinese: 團購; loosely translated as team buying or group buying) is a recently developed shopping strategy originating in the People's Republic of China. Several people - sometimes friends, but possibly strangers connected over the internet - agree to approach a vendor of a specific product in order to haggle with the proprietor as a group in order to get discounts. The entire group agrees to purchase the same item. The shoppers benefit by paying less, and the business benefits by selling multiple items at once.

1 In China
2 In the United States and online
3 References
4 External links

In China

The tuangou phenomenon has been most successful in mainland China, where buyers have leveraged the power of group buying, which has led to English language media, such as msn.com, profiling the tuangou buying process.^[1] The popularity of the strategy in China is often attributed to the Chinese tradition of bargaining for the purchase of goods of all types. Tuangou buying also ameliorates a traditional distrust of goods purchased from unknown sellers as individual members of the buying group can vouch for a particular seller's quality to the rest of the group.

Group buys are a variation of tuangou buying that also occurs in China, in which an item must be bought in a minimum quantity or dollar amount, otherwise, the seller will not allow the purchase. Since individuals typically do not need multiples of one item or do not have the resources to buy in bulk, tuangou group buys allow people to invite others to purchase in bulk jointly. These group buys often result in better prices for the individual buyers or ensure that a scarce or obscure item is available for sale. Group buys usually happen when dealing with industrial items, such as single-board computers.^[2] Group buys are often organized by like-minded people through Internet forums.

In the United States and online

There have been several attempts in the past to promote this type of purchasing behavior in the United States with companies like Mercata and Accompany (which used the trade name Mobshop) offering IPO's during the last dot com boom.^[2] However, tuangou buying has not proven vastly popular, as Mercata had to cease operation after spending millions of dollars fruitlessly. Several Web 2.0 companies seek to revive this type of buying behavior, especially since it brings the power back into the hands of the consumer by allowing them to leverage the power of group buying to negotiate better prices and purchase customized goods that require minimum order quantities. Rather than trying to navigate the full front to back supply chain, these sites, such as Group Buy Center,^[3] provide facilitation of group buys online and allow the masses to leverage group negotiation power over the internet but to date the market has been generally focussed on after market car parts, especially where the buyers need to group together to achieve the minimum order quantity required for purchasing custom parts. Also in the consumer elctronics world, especially audio, group buys are very common in online forums when expensive or custom parts are being ordered and a group buy is needed to bring the cost down to a reasonable price.

Although not the same, the English venture MyFootballClub has been compared to tuangou as a group of consumers, football fans, banded together to use their leverage as a group to purchase a football club.^[4]