Tug of war between the retailers and consumers: the phenomenon of group purchase in China

Abstract

Retailing shops are the contact points between customers and supply chain. On one hand, the retailers need to satisfy the customers by providing the right and enough products to ensure the service level; on the other hand, the retailers also need to minimize the costs while satisfying the customers. This paper uses a case study of GOME is to illustrate Tuangou, a relatively new phenonmenon that has spread rapidly in China, and to show how the company responded to the group purchasing shoppers. The case presents a tug of war happening between the retailers and consumers. The implications of Tuangou to the stakeholders in group purchase are also discussed.