The group buying deal continues to remain strong with more than half a billion dollar having been spent in the industry in 2012, according to the latest study from Telsyte.

The market generated $504 million. The combined revenues of the top five sites, Groupon, Scoopon, LivingSocial, Cudo, and OurDeal, showed greater than 9 per cent year-on-year growth in 2012, with the strongest performances coming from the top two sites Groupon and Scoopon, which have seen over 40 per cent growth year-on-year combined.

Changes in market conditions and aggressive consolidation during the past six months have produced a modest increase (1.4 per cent) in revenues compared to 2011. 

“Industry growth has come from increased mobile transactions, new merchants, increased consumer satisfaction due to better quality customer service and growing consumer confidence in the main sites,” says Sam Yip, Senior Research Manager at Telsyte.

Despite modest year-on-year growth, the industry is showing signs of rebounding with the past two quarters showing an increase after three consecutive quarters of decline between Q4 2011 to Q2 2012. Australians spent more than $130 million on group buying in Q4 2012.

Telsyte expects the industry to remain steady at around $500 million in 2013 with further industry consolidation likely to continue for another 12 months.

“Increased competition is expected to continue and create pressure on smaller group buying sites,” says Yip.

At its peak there were more than 80 group buying sites in Australia, while only around 30 are operating today.

The fastest growing segments in the market were retail product sales, and local deals (deals that focus on a certain local geography).

“The Australian group buying market has generated over $1 billion in revenue since its inception three years ago. It has grown from a simple promotional concept to a core segment delivering growth to the overall local eCommerce market,” says Yip.