According to a new study by telecoms, media and ICT analyst firm, Telsyte,  95 percent of businesses - businesses who sell products or services through group buying sites - were happy with their group buying promotions, with 85 percent of the businesses indicating that they will run another group buying campaign once they have tried the service.

Sam Yip, Telsyte senior research manager says, however, there is still plenty of room for group buying sites to strengthen and build long term relationships with businesses, and that 'most businesses, despite indicating that they will run another deal, are considering using a different site.'

Yip says that with the industry growing 72 percent last quarter, Telsyte estimates group buying in Australia will be worth about $400 million by the end of 2011.

The merchant study by Telsyte was conducted last month and was based on a random survey of 359 businesses across all leading group buying sites in Australia, with a broad range of merchants across all categories of purchase.

John Butterworth, CEO of the Australian Interactive Media Industry Association (AIMIA) says that group buying is clearly a major hit with Australian consumers and the dramatic growth in the industry demonstrates how 'digital channels and the rise of social commerce are underpinning significant shifts in consumer behaviour.'

'For such a new sector it's vitally important to understand not just the consumer side of the equation but also the merchant's perspective. AIMIA and its 460-plus member companies are delighted to support Telsyte in providing Australia's first insight into the seller's view of the group buying phenomenon.'

The study found that for more than one in five businesses that have run group buying deals, online group buying was the first form of mass marketing they have ever used.

'Now that we have identified inexperience in mass marketing amongst businesses, the group buying industry needs to move beyond merely closing deals with businesses, but start providing education, feasibility studies, and campaign services before, during and after the deal has run,' Yip said.

According to Yip, the expected results of running a group buying campaign are strong with the study finding more than two-thirds of businesses acquired new customers, increased foot traffic and increased overall customers as a result of a group buying campaign.

'The group buying market is proving to be a sustainable marketing sector and a real opportunity for Australian businesses,' Yip concludes.