Advantages and Disadvantages of Government-Regulated Group Buying Sites

With the abundance of group buying sites nowadays, it is no longer surprising that authorities have started to keep a steady eye on them. In the past couple years, certain group buying sites were reported for offering fraudulent deals. Although there are individuals who feel better now thinking that group buying sites have become safer, it is inevitable for the others to raise an eyebrow regarding the issue.

To be fair, both sides make reasonable arguments, which explain why certain people choose to react in a particular way towards such a matter. In this post, let us try to identify the advantages and disadvantages of government-regulated group buying sites. Before we begin analyzing, we must answer the question:

What do we mean by government-regulated group buying sites in the first place?

If a group buying site is regulated by the government, then it means that no one can purchase anything from that site unless he or she has a certain permit from certain government offices. Meaning to say, these particular sites have been officially recognized by the government, so all issues regarding it can be forwarded or traced back to the designated authorities. Also, the deals that they offer on these sites are also verified by these offices to make sure that zero products are neither fake nor substandard. This process rids any harmful products that could easily find their way in non-regulated sites.

Group Buying Sites Regulated by the Government

So what is good about these government-regulated sites?

Since these sites are carefully regulated by the government, buyers can be assured that the vendors and manufacturers they are transacting with are real. And if ever something goes wrong, it would be easier for them to get in touch with these sellers because they have ample records and documentations. Shoppers are assured that they are dealing with trustworthy individuals and legitimate companies, establishing such sites as the safer option.

Quality control is also another advantage of these sites. Since the government is involved in the operation of the sites, there is assurance that these products and services passed the qualifications and standards set by the government offices. They are also sure to have undergone ample screening processes to make sure that the products are exactly as how they are advertised.

Now what are the drawbacks of these government-regulated sites then?

First, let us take into account the main reasons why people have easily fallen in love with group buying sites:

  • Cheaper goods – Through group buying, a crowd composed of individuals who are eyeing on the same Smartphone, or laptop, or tablet, can actually purchase it a much lower price. This is due to the fact that a crowd has a stronger bargaining power compared to an individual.
  • Great deals – Group buying sites offer the greatest deals in town. This we all know. Besides the fact that they attract numerous buyers, they also attract a number of suppliers, manufacturers, and service providers that aim to offer their amazing products and services to interested parties.
  • New products – Apparently, there is a multitude of interesting new products in group buying sites. In fact, quite a number of small companies and starting businesses use group buying sites to promote their offerings to the public. This is their way of letting people know about what they, finding prospective clients in the process.

So how does the involvement of the government affect these?

If a site is regulated by the government, then it means that the government has a lot of say on the sites’ affiliate companies and deals. And since these government offices want to be stricter in their screening and monitoring processes, there is a big tendency that the deals, particularly the very cheap ones, will be somehow limited. For instance, officers might give more favor to more established companies with good records over the new or starting ones. They may also be stricter when it comes to new products and companies. Ultimately, the government’s involvement may lead to lesser deals and higher prices.

How Group Buying Sites Killed Multiply Stores

There is no doubt that social media and social networking have made a considerable impact in the lives of individual people and in the existence of billion-dollar companies. Basic social interactions, planning of family gatherings, and setting of meetings can be done anywhere with a WiFi connection, provided that you didn’t forget to bring your precious laptop, of course. It is this drastic technological innovation that gave birth to electronic commerce (a.k.a. e-commerce), an industry that utilizes the power of the Internet to promote the buying and/or selling of certain products and/or services.

Multiply Store

Multiply was launched as a social networking site last March 2004 where people can upload and share pictures, music, videos, and blogs to their friends. Before Facebook and Twitter dominated the social media realm, Multiply was able to build a vast, active network. With the innovations and creative mind of its followers, e-commerce became a significant part of Multiply. Different Multiply stores offered a wide variety of products that caught the attention of thousands of consumers.

Although e-commerce has been around since 2000, it was only in the year 2008 when online shopping businesses, particularly group buying sites, have made its way as another contender in the online market. Until now, group buying sites play a major role with today’s driving patrons, offering great discounts to popular gadgets and innovations. This type of e-commerce, in a word, killed, the multiply stores. Here are the reasons:

            Factors             Multiply Stores        Group Buying Sites
Offerings Products only Products, Services, Trips, etc.Most have a “product of the day” feature that entices its followers to buy.
Coverage Based on what the owners have in hand. Covers multiple stores, brands, etc.
Discounts Limited discounts. Discounts are everywhere.
Value for money/Quality Most products are unbranded, which gives buyers little idea about the products. Most products are branded which lets buyers know the quality of what they are buying.

The abovementioned comparison gives no reason to ponder how group buying sites kicked Multiply stores off the map of online shopping. Multiply itself seems to recognize this truth in the way it has tripled its effort to revive its stores. Not too long ago, Mutiply’s CEO, Stefan Magdalinski, announced that they will no longer provide the social media features they were initially known for. With this, they’ll be focusing more on e-commerce with its Multiply-Market Place, which is designed to serve their patrons in Southeast Asia.