The battle between Scoopon and Groupon over groupon.com.au domain and related trademark seems to be over. It’s reported in SMH that the parties reached settlement and US group buying giant got domain and TM for undisclosed compensation.
Industry experts believe that that the deal value is at least not less than $289K (the sum, which Scoopon founders brothers Hezi and Gabby Liebovich asked).
Despite of the deal groupon.com.au domain still leads nowhere at this moment. It’s be interesting to see how fast Groupon will change branding of it’s Aussie venture currently called StarDeals to Groupon.
Recent research conducted by Professor Utpal M. Dholakia from Rice University contains facts that are not very pleasant form currently booming group buying industry:
- just a bit more than half (55.5%) of businesses recorded a profit after group buying promotion, more than quarter (26.5%) made losses and the rest broke even
- less than half of businesses that ran group buying promotion are going to do it in the future;
- almost 3/4 of merchants have no loyalty to group deal provider and ready to switch
So the conclusion that the researchers made is not very positive for group buying industry especially for websites that provide deals: the little loyalty, low rate of interest to repeat purchase from merchants and increasing competition will lead to the erosion of the current healthy margin and make the life of group deals providers harder.
The research collected data from 324 US businesses operating in 23 markets that used group buying promotion in 2009-2011.
Continue reading “Group buying industry future looks not so cloudless”
As Techcrunch reported US group buying industry leader Groupon filed SEC registration statement (S-1 form). Groupon plans to attract $750M of capital . Unfortunately from the article and SEC filing it is not clear what number of shares and the percentage of ownership will be offered, but rumored valuation (according SmartCompany and Wall Street Journal) is around $20-25 billion.
There are some interesting financial data about the company performance till 1st quarter (ended March 31) of 2011. I put the most important numbers in the table below (all numbers are in thousands):
Continue reading “Groupon goes to IPO”
As ITwire reported, Groupon Australia (trades as StarDeals.com.au) declared last week that just in few months after launch Stardeals.com.au web site managed to acquire more web traffic than any competing web sites (biggest competitors are reportedly Scoopon, Spreets, Cudo, JumpOnIt/LivingSocial). Representative of US based pioneer of group purchases industry refers to Hitwise traffic statistic.
However competitors, namely Cudo, doubt that this statistic reflects the reality and Hitwise data has several major flaws: limited coverage (no Telstra and Optus for example), traffic is measured at providers (not users) so it is easier to use bots and tricky ads to inflate the statistic.
In my personal opinion these doubts look reasonable.
Professor Utpal M. Dholakia, Rice University, the guy who made probably the first academic study about group buying promotion published a new paper – “A STARTUP’S EXPERIENCE WITH RUNNING A GROUPON PROMOTION”. He did this job with Gur Tsabar from Gourmet Prep Meals (GMT), a start-up that participated in the study.
GMT is a start-up business from Texas that sells ready-to-cook food sets online. After couple months of operation GMT launched Groupon promotion and share with researchers all the data from their accounting system to analyze the effect of group buying promotion to GMT business.
- Groupon promotion definitely boosted the revenue;
- The overall profit was not affected significantly before the end of promotion, taking in account coupons that were not used the effects is positive;
- The margin dropped during the promotion;
- Peak loads with most active redemption of coupons were the start and the end of promotion time, heavier at the end, just before coupons expired;
- Group buying customers are especially useful for start-ups, since help to test the business model and provide valuable real feedback
Full report is available at Dr. Holakia’s page: http://www.ruf.rice.edu/~dholakia/
Next interesting deal on Aussie group buying market, after Yahoo!7 bought Spreets last year and JumpOnIt was sold to LivingSocial, last week the world-wide market leader and pioneer, US based Groupon purchased Melbourne group purchase web site CrowdMass.
If you visit Crowdmass web site you will see the message:
Crowdmass has joined the team at Stardeals by Groupon Australia (part of the fastest growing company in history).
Reportedly, as I understood from the record in the blog of the guy who knows them, Crowdmass founders – David Wei, Ying Wang and Tim Wu remain in the Groupon/Stardeals team.
According to US daily deals aggregation service Yopit Groupon’s revenue decreased 30% in February 2010.
Is such decline a sign of the fade of the daily deals market in general or Groupon’s particular problem? The company has changed it’s business model significantly from single “the best deal in the city”, that worked extremely well and helped Groupon to become multi-million business in very short term. Now there are such stuff as geo-targeted deals, merchant’s stores.
Maybe this is not what Groupon costomers are looking for and this new business model conflicts with Groupon’s brand promise?
Interesting that according Yopit, LivingSocial – second business group buying web site revenue has been growing in “59% in March and is now generating as much revenue as Groupon in major markets”.
Today I have passed by Stardeals.com.au web site (that is the name that Groupon has to use in Australia) and have discovered that they finally started to sell something real!
There are current deals advertised for for Melbourne, Sydney, Perth, Brisbane, Adelaide, Newcaste and Canberra plus a National Deal. If we dig a bit deeper however, appeared that so far site is really working for Sydney only, where more than dozen past deals reported plus a bit for Melbourne (1 deal). For other the deals showed in fact are national as I see.
Regarding Sydney the progress is not bad, from past deal most popular really local deal (10-day Pass to fitness centre) was sold 776 times, first deals started from just 108 purchases.
Group buying industry is booming in Australia according recent research of Telsyte (business unit of Gibson Quai-AAS Consulting) and the market will grow 284% this year.
The research covers over 20 group buying web sites that offer heavily discounted group deals for Australians. Over 79% of the market share reported to be taken by four leading players (Spreets, Scoopon, Jump On It, and Cudo).
This figures correspond quite well with the study that we did last fall.
Telsyte makes some interesting forecasts about future industry trends, namely (my comments are in the brackets):
• Arrival of large online multi-nationals such as Google, Facebook and Groupon into the local group buying market (actually GroupOn is already here).
• Agencies representing merchants in deal negations and analytics.
• Proliferation of mobile group buying applications (at least Scoopon and one new smaller – CrowdSauce already have iPhone apps).
• Local media publishers entering the group buying industry through white-label software platforms, acquisitions, or distribution partnerships (we also already see it, with Telstra/Sensis that launched YellowPage Offers).
Some more details about research avalable at Telsyte web site
As we wrote before, GroupOn came to Australia as StarDeals.Com.Au. Yesterday Andrew Mason, the founder and CEO of GroupOn wrote about it in GroupOn blog He wrote that sorry for delay (to enter Australia) and blames ScoopOn in making life difficult for GroupOn:
“Scoopon went a little further than just starting their Groupon clone – they actually purchased the Groupon.com.au domain name, took the company name Groupon Pty Limited, and tried to register the Groupon trademark (filing for the trademark just seven days before us) in Australia.”
Mason mentioned that they offered $286K to ScoopOn for domain name and trademark and initially Scoopon owners had agreed, but later changed their mind. So now, according to GroupOn CEO, they have no other choice than suit ScoopOn in court. The case will be heard Feb 05 in state of Illinois court according SmartCompany. Scoopon chief executive Gabby Leibovich is confident in his company position, he said to SmartCompany:
“Groupon’s attempt to try and have this matter ‘determined’ in the court of public opinion is unfortunate and possibly amounts to sub-judice. As the matters in dispute are presently before the court, it is inappropriate to publicly comment on matters before the court.”
We’ll follow-up the process