WujWuj's New Focus: Make Online Retail Go Viral

When online retail service WujWuj first launched, it focused on helping people pool their money to buy gifts for friends and family. That never really took off, so the service was shut down and is now being reborn with new focus on so-called “group buys”.

A group buy is a type of sale in which the price of an item drops as more people commit to purchasing it. Consumers benefit from lower prices as more people commit, and retailers benefit from an increase in sales volume. Essentially, it’s a way for retailers to incentivize their consumers to market their goods for them, because customers will be inclined to spread the word about deals.

WujWuj CEO Monti Majthoub tells me that most group buys are currently organized in online forums like FatWallet and AnandTech. His new GroupBuy system adds more structure and “viral” potential to the process by leveraging the power of widgets.

Here’s how it works. WujWuj’s retail partners enter their goods into the GroupBuy system and then embed special GroupBuy widgets on their websites. Each widget shows a photo of the item on sale and how much the price will drop as more people commit to buying. Consumers who have already committed to buying (after seeing the products on retailers’ sites) can grab the widgets and embed them on their own social networking profiles and websites, which will then lead their visitors back to the same WujWuj purchasing form.

Customers are guaranteed to pay no more than the maximum price they’ve indicated for a good, and once the time period is up for a particular group buy, all of those who have committed to purchasing will pay the lowest price reached. WujWuj lets retailers charge customers with their own payment gateways and it collects just 1.9% of all successful sales as a fee.

Will this system make online group buys more popular and viral? Majthoub is cautiously optimistic. He points out that several other companies (such as previously reviewed eSwarm) have tried to improve the group buy process and failed. But he also believes WujWuj may have finally devised a system that’s so simple for both retailers and consumers that it might actually work.