Russia’s economic downturn leads to rise of group buying websites
15 January 2015
Russia’s economic instability leads to consumers being more careful about their expenses. However, they still want to treat themselves, pushing group buying sites* such as Groupon or Biglion.ru in the spotlight, argues Veronika Zhupanova, analyst at Canadean.
Consumers are trying to save at all costs
Consumers are trying to save at all costs: According to a VTSIOM’s (Russian Public Opinion Research Centre) survey from December 2014, 56% of Russian consumers constantly limit their expenditure, compared to 13% in 2012, and 21% have only started to do so recently. Veronika Zhupanova, analyst at Canadean says: “This reflects how the rouble devaluation and recent political and economical events have made consumers thriftier with their expenses, as many of them are unsure of how much they will be able to afford tomorrow.”
Group buying sites offer better prices
Despite the tough economic situation, consumers still want to treat themselves, and seek for opportunities to do so at better prices. Group buying sites, such as Groupon or Biglion.ru, that offer discounts on products and services, have more opportunities than ever to respond to this need. Launched in 2012, Repka.com – a group buying site where consumers get better prices due to bulk buys – reports a sales growth of 300% between September and December 2014. Repka.com's revenue stood at 150,000 - 180,000 RUB (2,298 USD - 2,758 USD) per month in autumn 2014, and the site's turnover is expected to increase to up to 50 million RUB (766,079 USD) in 2015.
Zhupanova says: “While consumers refrain from big-ticket purchases, such as holidays and new cars, they will continue to want to treat themselves in these tough economic times. This presents a great opportunity for group discount sites offering indulgent products and services.”
Quality is key to customers’ satisfaction
Group buying sites are fairly new in Russia, which means that a number of consumers will be sceptical about the quality of products and services, as well as discounts being genuine. To fix such perceptions, the sites have to ensure that suppliers keep the quality of their products and services consistently high and verify that consumers are getting a proper discount.
Zhupanova adds: “When customers are not 100% satisfied, they will associate group sites with poor quality products. Thorough selection of manufacturers or service providers and excellent customer service will benefit the sites, suppliers and consumers.”
Groupon.ru offers red caviar from Kamchatka.
*Website that offer consumers goods and services at discounted prices that suppliers are able to provide due to shifting large volumes
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