Every week, Toh Lixin, a Singapore healthcare worker, offers discounts on things like fruit tarts, bottled coffee, and young lobsters to roughly 4,000 of her neighbors. Toh, 26, is the founder of an unofficial consumer network that uses Telegram, WhatsApp, and Instagram to coordinate group purchases. She founded the organization in October of last year, and she typically receives approximately 50 weekly orders.
Singaporeans like her have started at least 20 group-buying communities since the outbreak began. Baby lobsters can be delivered for S$24 ($17.60) to residents in Bukit Panjang, a neighborhood on the island’s northern corner. This is half the price of what restaurants downtown charge. While the majority of groups focus on food, some of the larger group-buy networks also sell home items like cleaning supplies.
Customers pick up the things, frequently from the hosts’ homes, after the hosts, who are local citizens in charge of the groups, negotiate prices with businesses. Delivery rates, which might initially be as high as S$18 per customer, can be reduced to a few cents per customer by groups, and hosts can negotiate savings of up to 30%. Customers pay the hosts via mobile banking, and Toh levies a S$2 administrative fee every order.
In other nations, buying in bulk is a common manner of doing business. E-commerce companies like Pinduoduo Inc. in China support such buying groups. However, in Singapore, the industry has grown from the ground up, with tens of thousands of people participating in informal networks established by members of the public. During the pandemic, when accessing physical stores can be difficult due to social-distancing constraints, the groups have grown in popularity.
Orders are placed through texting group discussions.
The groups may also be a sign of a broader shift in Singaporean consumer behaviour as more shoppers go around intermediaries like retailers and distributors and instead place orders directly with producers, according to Daniel He, assistant professor at the National University of Singapore Business School.
“What makes the latest iteration of group buying revolutionary is that it exemplifies a new business model, known as customer-to-manufacturer,” he said. Businesses like the model because it guarantees sales volume at a time of economic uncertainty, said He. “C2M as a business model is likely here to stay.”
Some organizations encounter logistical and staffing challenges as they grow fast. Some hosts have begun to use paid platforms to help them run their businesses more efficiently. “It’s easy to collect orders and money, but it’s tough to manage when a lot of money comes in at once,” said Sunny Tan, co-founder of e-commerce solutions platform UnitySuite, which charges monthly fees of S$59 for basic services like order consolidation and inventory management.
According to Christine Quak, a public-relations agency owner who makes at least four group-buy orders per week, there’s more to group-buying during the pandemic than convenience and money. Her more than 700-unit condominium community offers one or more group-buy listings per day, with items ranging from fresh veggies to imported pineapple pastries.
“It is also about paying it forward,” Quak said, “helping our businesses during these tough times.”
Source: Yahoo News