A recent flurry of investor activity in group buying websites has helped to spur growth in the nascent category: Visits to social commerce and group buying sites for the week ended April 17, 2010 were 72 times greater than the equivalent week a year earlier, according to Experian's Hitwise Intelligence.
Groupon and LivingSocial now account for nearly all visits—with 49.2% and 49.0%, respectively—within the custom category of eight group buying sites. Newcomer BuyWithMe accounts for 1.42%.
Social buying sites use collective bargaining power to offer deals at local businesses—such as restaurants, bars, spas, theaters—as long as enough people participate.
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Facebook accounted for 31.9% of upstream traffic to group buying sites in the week ended April 17 and is the biggest referral source to the category.