5 On Your Side

Web sites offer daily deals using group-buying concept

Posted April 5, 2010
Updated April 24, 2012

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— The concept of Twangou or store mobbing started in China. The practice involves a group of people mobbing a store and haggling with the owner to get discounts by buying the same items.

Several companies are pushing the group-buying concept to the Internet.

Twongo.com offers discounts like $16 for a meal valued at $40 and 55 percent off of spa treatments.

“Twongo is a social savings platform that connects local businesses with local customers. We offer one deal a day,” Twongo founder Brad Halferty said.

Save City website Website offers discount deals

Halferty said the site is simple to use. Consumers can sign up using their e-mail address to receive free notices for the daily deal. If they like the deal, they can buy it.

Deals are typically 40 to 50 percent off, Halferty said. “It depends on the business, depends on the deal and actually depends on the number of buyers,” he said.

The more people who buy the deal within the designated time period, the bigger the discount is.

One example is a golf package valued at $250. Halferty said the starting sale price was $125.

“Enough people purchased it that it went to $95, so the people that purchased it early on still got the lowest price,” he said. “That's what encourages the use of social media and sharing the deal, because the more people that join the deal, the more everybody saves.”

After purchasing the deal, people can print a voucher to use for the service.

At the Aveda Institute in Chapel Hill, about 318 discounted vouchers were sold for a deal offering $100 in services. Managers said the deal hit its maximum discount – 55 percent – within a few hours.

Twongo’s concept is similar to another online discount business called Groupon. The Web site offers a new deal each day. Recent examples include a $320 dental exam for $59 and $20 off a house cleaning service valued at $50.

Groupon has also offered deals as small as $2 off a $7 smoothie.

But with Groupon, the deal is not guaranteed, and consumers are not charged unless a minimum number of people buy.

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