It's not a deal, it's a steal!

What can you get for Rs 25? A comprehensive eye check-up and ophthalmic advice at a state-of-the-art hospital. Where can you find a 75 per cent discount on branded sun glasses, 42 per cent off on a well-known home theater system or a flat 80 per cent reduction on popular ladies watches?

Which swanky new Chinese restaurant offers to shave off 63 per cent on your bill? For Rs 299 you can enjoy a full body massage, sauna and Jacuzzi at a well known salon, which would usually cost Rs. 2,599.

No, we are not recommending dubious businesses selling spurious goods here. These are just a sample of offers tumbling out of the rapidly growing group-buying sites in India.

Groupon, which turned group buying into a popular rage in USA, has spawned several clones in India. The number of desi deal makers stood at 30 when counted last - Deals and you, SoSasta, Rediff Deal Ho Jaaye, Koovs, Dealivore , Mydala, Timesdeal, Snap Deal, Cityoffers, Bindaas Bargain, Taggle - to name a few.

The leader of the pack, according to many, Snap Deal, launched in February 2010. Its CEO Kunal Bahl says Snap Deal has 70 per cent market share in India and has grown 100 per cent month on month. The site closes 250 to 300 deals per day, has tie-up with 5,000 merchants and is ranked India’s 20th most popular website by Alexa. According to Bahl, Snap Deal offers an average discount of 30 to 70 per cent targeted at the customers in the age group of 15 to 35 years (both male and female) in 45 cities.
The mighty Groupon also entered India in January 2011 by acquiring a company with a name to die for: SoSasta.

How they work
All of these sites put group buying into practice.  They squeeze steep discounts from businesses promising to deliver a large number of customers for their products. Websites like SoSasta, Buy the Price and My Dala operate strictly on the principle of group buying, that is, a deal in them goes live only after it attracts a minimum number of buyers. But offers at Snap Deal and Rediff Deal Ho Jaye are not linked to the number of buyers.
So Sasta offers one good deal a day, Koovs.com may bring you as many as 15 deals per day. Rediff Deal Ho Jaye provides cash-on-delivery option to its users. Most of them offer an eclectic mix of products of services – offers from spas, salons, restaurants, travel agencies, theme parks, electronic gadgets and fashion accessories. Specialisation is a growing trend and Buy the Price focuses on electronic goods. Deals. plugged in, another niche player brings offers from service providers to startups.

Though most of them focus on major cities, smaller cities, which are rapidly getting connected, seem to be the next battle ground. Rediff.com Deal Ho Jaye went live in 40 towns in April 2011.According to Vivek Sharma, Senior VP Rediff com, the company hopes to target more and more B & C cities in the future. 

These sites make money by taking a cut from the businesses they feature or by charging a ‘token’ amount from buyers, which is then adjusted against the final value of the product. But what prompts the vendors to sell their products at throw-away prices.
According to Bahl the deal websites are a great way for merchants to acquire customers. Most of the sellers on group-buying sites are the small or local players though of late even known brands have begun testing the medium.

Ajay Singh, co-owner of Makeover salon, Bangalore, says he opted to sell on a group-buying site to advertise a new branch to customers. Mohit Appana of Kukkare restaurant, which features on several group-buying websites, says, ‘‘As we are a new restaurant, we need to attract new customers.” He is aware that customers who are drawn in through these sites do not ring in profits. “The idea is just to generate more footfalls than profits,” he says.

Ashish Sinha, chief editor Plugged.in further explains the dramatic discounts offered by these websites. ‘’Spas and salons offer their service at steep discounts as their services may be often overpriced,” he says. For product companies group-buying sites offer a way to clear stocks and save on inventory cost, he says.

Whatever the reasons behind the discounts, customers appreciate the offers. Nadeem Sharieff tested waters successfully and now routinely scans these sites to find useful deals. Ambu Sasidharan says the sites help him find heavily discounted meals near his home.

Customer complaints
But as the group-buying idea catches on customer complaints seem to be building up against spurious merchants and the inability of these sites to check them.

Common customer complaints include delay in receiving product shipment, delivery of dubious products and sub-standard service, and poor customer care. In a few cases the ordered products never arrived. The fine print may also make a deal less attractive.
Satish Vijay Kumar bought a Rs 250 deal-voucher to buy DVDs from a startup. When he went to the outlet, he found that the staff at the counter was not aware of the deal. After persisting, a manager told him that he could get a discount of Rs 250 by buying DVDs worth above Rs 1000. The deal site’s customer service executives were of no help. Only after he posted a complaint on Facebook, the outlet agreed to honour the deal.   
Manoj K Agrawal’s first ever experience on a deal site turned out to be an ordeal. He paid for a hotel room for vacation in Goa. To his shock, the dingy room he was eventually offered was not the one that was showcased in the advertisement. It took repeated complaints to get the refund from the deal site, he says.

Many deal sites say they are evolving checks to prevent such frauds and respond to customer complaints promptly. Sharma says Rediff Deal Ho Jaye has created a separate cell to ensure customers get only valid discounts. Snap Deal also has a merchant scrutiny system in place and offers complete refund if there is any deficiency of service.

In sum, customers are advised to temper their enthusiasm with caution to make their dream deals come true.