Despite overall weakness in the retail market, the Australian group market remains strong generating $115 million Q1 2013.

The latest Australian online group buying study by Telsyte shows while there was a 7 per cent decline over the same period in 2012, the market is expected to remain steady for the rest of the year with revenues of around $500 million as a bulk of consolidation amongst the industry’s smaller players already having past.

In 2013, Telsyte expects the largest sites to be focussed on better product sourcing, improved customer service, and creating longer term relationships with successful merchants.

“The industry is starting to mature, with merchants and group buying sites understanding that they need to be more selective in the types of deals offered,” Sam Yip, Telsyte senior researcher, said.

In Q1, the fastest growing segments in the market were travel deals and premium event offers.

“Food, dining, health and beauty will continue to provide a solid base of revenue, however, in 2013 we expect to see the emergence of deals which aim at more affluent demographics, and deals which require consumers to commit to ongoing delivery of products such as health supplements, baby consumables, and hygiene products,” Yip said.

Telsyte expects new players like restaurant “booking sites”, which provide exclusive discounts to subscribing consumers and “online coupon sites” which allow consumers to access discount coupons for minimal cost, to bring healthy competition to the group buying industry and provide more choice for consumers.

“Consumers can expect to see more variations of the daily deal concept and similarly merchants can expect to have more options when looking to run a discount deal,” Yip said.

The top five players in the market – Groupon, Scoopon, LivingSocial, Cudo, and OurDeal – generate over 80 per cent of the market revenue.  Telsyte expects this trend to continue in 2013 with the disappearance of many smaller group buying sites.