Multi-national group buying sites are driving strong industry growth with LivingSocial and Groupon growing 75 per cent and 118 per cent in the quarter respectively, according to the latest research from Telsyte.

The group buying market grew from $123.9 million in the 2011 second quarter to $158.5 million in 2011 third quarter representing a quarter-on-quarter increase of 28 per cent.

Telsyte senior research manager Sam Yip said the growth proves that the money being spent on strong local marketing is paying off as it’s not only capturing the attention of consumers but they are being converted into sales.

“The strength of multi-national brands and marketing budgets once again has proven their ability to rise to the top in the Australian market. We’ve seen this happen with similar online markets in the past such as online search and online auctions,” he said.

The travel category has also contributed to market growth this quarter. Travel deals now account for 24 per cent of total market revenue making it the largest deal category.

“In less than three months, travel deals have moved from being the smallest category to the largest,” Yip said.

“Group buying sites have quickly responded to the popularity of travel deals by categorising their deals on their home pages, or creating travel specific sub sites the last quarter.”

Year-to-date the market has generated $320 million and is on track to significantly exceed Telsyte’s market forecast of $400 million for the 2011 calendar year.

“The industry never fails to surprise us each quarter. We have seen double-digit quarterly growth for the past three quarters and can expect to see this trend continue next quarter,” Yip says.

“The group buying industry is highly seasonal. Holiday deals, promotions and offers will boost growth.”

The number of group buying sites has grown four-fold in the past six months from 20 sites to more than 80 sites now in operation.