Everyone loves a good bargain, right? One Singapore startup is betting on the fact that most of us do when it came up with a proposition that will allow consumers to mutually benefit by banding together.
Beeconomic began operations this year with a fundamental idea: create a platform on which consumers looking to purchase the same product can come together and put in a bigger order, so merchants can offer the item at a better discount. It's win-win for both the buyer--or in this case, buyers--and seller.
Such group-buying sites aren't exactly a new concept. They've been around since as early as the turn of the millennium.
It builds on the same business model e-marketplaces, which once touted similar cost benefits from economies of scale and common component sourcing.
While such B2B platforms never quite took off despite the hype in the early 2000s, group-buying sites appear to be enjoying a resurgence of sorts in the U.S., led by sites such as Groupon, and we may just see the same happening in this neck of the woods.
And sites like Beeconomic have a few things going for them that their forefathers didn't have, specifically, the emergence of viral marketing and social networks. Both elements are key in any business that relies on word-of-mouth and consumer participation.
Karl Chong is the founder and managing director of Beeconomic. I invited him to take centerstage on Tech Podium this week and explain his company's business model, as well as discuss the role of "social" in driving an organization's social media strategy.
Karl worked in various organizations, including in New York and Sydney, as an investment banker and financial analyst. It was in the Big Apple that he latched on the group-buying concept and promptly saw through that vision with the inception of Beeconomic.
Many businesses assume that social media can bring them more exposure and sales. However, setting up a Facebook Page or Twitter account is only half the journey--it gives you exposure but may not lead to new sales.
We started Beeconomic to help promote local businesses and fill the gap between having a social media presence and leading paying customers to their door.
Beeconomic is an online city guide that features a daily deal on something cool to do, see or taste in Singapore. The model is simple: a deal is offered to our subscribers for 24 hours but is only available if a minimum number of people sign up for it. If not enough people sign up, the deal is off and no money is exchanged.
I came across the concept of collective buying when I lived in New York. A friend of mine forwarded me an e-mail from a group-buying site (GBS) that offered an indoor rock climbing deal at 75 percent off. The offer was hard to resist so I bought the coupon. It didn't take long for me to realize that the model would eventually be a huge trend in Asia. So I left my Wall Street job and co-founded Beeconomic, Singapore's first GBS.
When we started negotiating deals with businesses wanting to be featured on Beeconomic, our value proposition was clear. We could offer a risk-free way to reach out to thousands of new customers without any upfront costs. We only take a portion of coupon sales so we only win if businesses win.
We use social media to not only give the featured business a presence but also to spread the word virally. Our homepage has easy to use links to be able to share the daily deal on Facebook, Twitter or via e-mail. People are encouraged to spread the deal through our $5 referral credit system. This is one example of how social media can be harnessed to lead to a viral effect.
While we are in business to make money, one thing we are very careful about is not to use social media as if it's just another billboard for monologue marketing. If you do that, then consumers will give it the same disregard as they may with traditional advertising on print, radio and TV.
What makes social media different is that it's more about the "social" and centered on how people interact within a community. Any Facebook Page should be treated as a living room where dialogue is transparent, questions are answered and consumers are encouraged to interact. If you can use social media to develop relationships with consumers, then you can go a long way tapping this platform for your business.
For us, the results have been pretty amazing. In just ten weeks since our launch on May 2, 2010, Beeconomic has saved its subscribers over S$200,000 (US$145,519) and sold almost 3,000 coupons. We intend to continue to invest money in improving our subscribers' experience and customer service, and plan to expand into other Asian cities this year.