Groupon is being hailed as the next big online ‘thing’. It attracts business from companies which would otherwise have used traditional media to reach consumers.
Groupon launched in 2008. It’s a deal-of-the-day website that is localised to major markets in the US, Canada, Brazil, Germany, France, the UK and a bunch of other countries. It offers one Groupon each day for each of the 150+ locations it serves. Businesses use the service as they would advertising except that with each Groupon there is a clear call to action.
The company just completed another round of funding which has resulted in the business being valued at around US$4.5buillion. Not bad for a start-up from 2008. We are going to hear a lot more about Groupon and the look-alike companies in this offer a day space.
I have been signed up for Groupon for a while. The deals which come through, while not available here, are fascinating.
Zoupon is an Australian site which plays in the same deal a day space.
In a related story, Amazon last week launched an iPhone App which offers daily deals. This and Groupon are examples of new channels for promoting specials and sales.
We follow Team Spreets, same concept
Interestingly groupon knocked back an offer of $6 Billion offer from Google a month or so back. Speculation is that it is because google are struggling in he hyper local market as their business is a person to machine business that really hasn’t done well in the gritty messy granular world of retail sales.
There are others in Australia, probably the most prominent being Cudo which is owned by PBL, and is using free TV spots provided by PBL to spruik it. Quite successful I hear.
The real problem is the structure of these deals. I looked into it s a publisher and they want a 50% off RRP deal to offer (as a minimum) and they want 50% commission on that revenue. So you really need to have a business with a 300% – 400% margin on your unit costs.
Hence they end up with lots of deals for Taco’s and hairdressers. You need a huge margin on your product for it to work.
What I find interesting is that ACP can’t even make it work internally (ie there are no ACP magazines offered by Cudo)
Groupon recently had a major stuff-up in Japan and released an apology for it.
http://www.youtube.com/user/gruponpon2010
I wished some other companies had CEO’s as honest as this guy.
Yahoo just announced that they have purchased Spreets (an Australian deal of the day company) for $40 Million.
The founders started it in February 2010.
Can anyone say “Internet Bubble”?