What is Tuangou?

Sep, 07, 2010

This is a first post in a new series about tuangou and the development of collective bargaining on the web.

Tuángòu (pronounced “twangoo”), which roughly translates as “group buying” in Chinese, is a shopping strategy and internet phenomenon.

The idea is simple in nature.  Multiple customers approach a store and arrange for a lower price based on the increased sale quantities involved.  If a store knows that all of it’s stock of shovels (for instance) will be purchased- it can afford to lower the price for those shovels.  Make less on more rather than charge more for less.  Adjusting the mark-up, a store would essentially make the same if not a little more by selling more items- think Walmart.  In the case of making slightly less, the store has gained more customers with the potential of future sales.

While the concept has been around for years and had been toyed with during the early part of this century, Tuangou didn’t survive the “Dot Com Bust.”  The social media infrastructure we currently enjoy, a critical factor in tuangou success, wasn’t as prominent or rapid during this first series of attempts.

It’s clear that the timing is now right for collective individual buying as exhibited by superstar internet site Groupon which was recently hailed by Forbes as the “fastest growing company, ever.”

Groupon’s mega success story is only the tip of the iceberg.  Group buying empower is the next step in empowering the customer through social media.  It started with social media providing platforms for immediate customer support and feedback.  The mystery of obtaining ROI on these efforts has been the challenge of the past few years.  Tuangou will enable social media to drive bottom line dollars, revolutionizing the value of two-way digital dialogue.

The offer-of-the-day sites are popping up everywhere, but this is not the furthest extent of where it can go.  The next step for collective or group buying is to increase transparency and ensure they’re sustainable through all-way success.

  • http://www.facebook.com/ewinwinemployee Katie Kail

    I think platform providers, like eWinWin (http://ewinwin.com/), are the next step for group buying. Unlike group buying middlemen, they allow businesses to customize their deal. They also take a smaller percentage and give businesses access to buyers’ email addresses so they can market to them again in the future.