We earlier covered Taggle, one of the latest (and hopefully the last) entrant in group buying space in India.
Like we mentioned in our earlier review, Taggle’s core USP in the current state is the founding team [rich work experience in building consumer brands and the strong network] and we have learnt from multiple sources (including this) that Taggle has raised funds from Battery Ventures and Greylock Partners [in the range of $2-3mn 8.75mn$ (in tranches), as confirmed by Taggle team].
Group Buying Sites in India
There are close to 10 group buying sites in India and while many of them have simply copied the Groupon model (even text/FAQs/buttons), the general lack of awareness of performance based advertising among the SMB crowd in India is not yet conducive to them.
Unless these sites have a great partnerships in place [which is where Taggle has an edge and so does a few other early movers], expect unrest in the coming days.
Recommended Analysis: Business Model of Group Buying sites in India
Update: Taggle has raised $8.75mn and it seems the bet is on the management team, as we pointed out earlier.
It is really surprising to know that still group buying venture episode has not been finished yet. With tens of clone of groupon, India is riding high to replicate the success of groupon by these clones in indis also. But remember one thing, no clone get success without any proper business plan. Just 15 days back I had done a simple business plan work for the group buying business model which gave me very negative impression about group buying business in india. Here are few facts :
1) The no of online users in India are 37 times lesser than UK & US.
2) With the profit margin of 10% it difficult to sustin any business model which is completely depend on volume game.
3) If you calculate properly, one cant make out NET profit upto 3- 4% untill and unless they have minimum 100 buyers for each deals and minimum 10 deals every day. That why minimum 1000 buyers every day which seems to be quiet difficult.
4) Despite of all, this model is location based not an exact e-business. You cant operate & offers deals in that city untill an dunless you dont have ground team in that city while e-business advantage is single location multiple region concept.
5) even after aggresive marketing, multiple deals and multiple buyers and after having minimum 1000 buyers every day, company can make only USD 300K net profit after 2 yrs aprox which is non attractive towards investors.
Since indian get influence with some concept, runing overseas, very fast, they forget the huge gap in india between consumer bahaviour and e-comm penetration in india…
Any way, I would like to wish a luck to all new group buying startups.
Shanu
http://www.dazeinfo.com
Information is useful, if people can find it !
I think funding will help them scale up. Here I think the investors went more by the founders rather than the business model. The game here is to get big fast and kill the others in the business.
I think the funding will be used to add some more “value” to the group buying discounts – and I hope thats not the case.
Lastly, some good points were made in the comment above on the numbers. I would be very happy to make these guys make money in a 3 yr horizon – and very surprised if they do.
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