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.
All of the group buying websites are leveraging Facebook in some capacity, such as fan pages or user access to their sites via Facebook logins.
Email sites, such as Yahoo, Google, Gmail, and Windows Live Mail, are also top drivers of traffic for the deal alerts.