With the rapid growth of the country's retail industry, coupled with higher Internet penetration and improved spending power, online group buying market is expected to grow by around 200-300 per cent over the next two years, an industry expert said.

In online group buying, websites put up discount deals offered by merchants on various services and products. The deal materialises if it gets a minimum number of buyers, through the website.

"Increase in the internet usage, coupled with the rise in discretionary spending among the middle-class will translate into a large profitable market for group buying. Though at a nascent stage presently, we expect the industry to grow by around 200-300 per cent in the next two years," DealFace.com Chief Executive Officer, Faisal Farooqui, told PTI here.

The total online group buying market is estimated at around Rs 2,000 crore, he said.

Presently, there are over 20 websites in the country offering daily discount deals online.

According to Experian Services India, a global information, analytical tools and marketing services company, visits to such sites have increased in the last one year.

The visits to five leading online shopping sites -- Snapdeal, bagittoday, DealsandYou.com, SoSasta and Letsbuy.com -- rose from 0.65 per cent in May 2010 to 18.68 per cent in May this year. .
Experian Services Managing Director (Marketing Services), Navin Chandani, said that group buying sites have re-invented social sharing as well as email marketing.

"Group buying is emerging as a financially economical model for merchants to promote their products and services and to reach out to a large target audience. This makes it an attractive proposition not only for the customers and merchants but also to the website owners, who earn through email marketing and commission," he said.

Apart from products and services, discounted deals are now available on spas, dance classes, health checkups, car service, restaurants and even spiritual healing, Farooqui said.

Dealface.com, which currently has tie-ups with 120 merchants in Mumbai alone, plans to increase the number to 1,000 in the next few months.

"We also want to expand our presence in other cities. We are in talks with several merchants and we believe that by December-end we will be present in all the major cities," he said.