Groupon may rule them all in New Zealand

 

 

Yesterday a piece by The National Business Review reported the touchdown of (another) major daily deals site, Groupon, in our market. New Zealand in the last few months has been saturated by deals, deals, deals, to the point where I actually unsubscribed from some of the services. Yes I may have missed out on deals but I’d rather stay sane than cheap.

To New Zealanders who don’t know who Groupon are, they’re currently ranked by Forbes as the fastest rising web company in the world. Ever.

How fast? Fast enough to have Google gagging to acquire them late last year for a reported 6 billion dollars and still have Andrew Mason, Groupon’s 29-year-old founder, turn them down.

This group-coupon site (see what they did there?) has a worldwide database of 50 million people and growing. It operates in a similar way to other deals sites like Yazoom, GrabOne, Treat Me, Spreets, Groupy with one key difference:  The discounts up for grabs from restaurants, lawyers and even real estate properties are dependent on two things, acting before the offer-expiry time and wrangling the required number of buyers to make the offer valid within that time-limit. This genius feature means the offer only exists if you can get the required number of people to buy the deal within the allotted time – it’s a built in advertising incentive.

Aside from this model, what Groupon brings to the market is money, more money than all the other deals websites in New Zealand put together. And if things keep going to plan for the fresh-faced Mason and co, we could see Groupon make their debut with a reported $15 billion dollar IPO when they go public soon.

However, It’s not all rosy for the chicago based company who in the last few months have been battling class action suits ranging from their deal terms to selling an alcohol coupon on the site – an activity deemed illegal in certain states of the US.

Groupon’s arrival to New Zealand has the potential to save us from the multitude of deal sites by acquiring them and creating one ecosystem of Groupon powered sites, or by buying up the less-popular deals sites and giving GrabOne, Groupy and Treat me a run for their money. Let the arm wrestle begin!

[Hat Tip to NBR for reporting the story first]

Editor in Chief at here SMNZ, I have a passion for social and digital media. When not writing and managing SMNZ I am the Head of Innovation at TAG The Agency, a digital ad agency and the Head of Sales and Marketing for End-Game, a software development agency. I'm also involved with a number of startups and I am always keen to support those that are bold enough to give things a go. Start something, better to try than to live wondering what if...

6 Comments

  1. fbnz Reply

    3 comments that I have on the points you’ve made in your article:

    1) “Deal activation” is common across the other NZ group buying sites too. It’s certainly not unique, nor is it a point of difference.

    2) To date, estimates for Groupon’s total raised funding as at about USD 1.1 billion. Now that is a lot of money, but Groupon also operates across 565 cities. By comparison, TreatMe (which is backed by TradeMe), operates across 13 cities in 1 country. GrabOne is backed by APN, Cudo is backed by Mediaworks + NineMSN etc… So perhaps the statement that “what Groupon brings to the market is money, more money than all the other deals websites in New Zealand put together” is a bit of a stretch?

    3) Further to the point above, in the early days of TradeMe they beat off eBay from its entry into the NZ market, and back then eBay was very much the equivalent of what Groupon is today to ecommerce and mass market trading.

    It seems like you’re a big fan of Groupon, and I am too. But I don’t know if that alone qualifies the belief that they will come in and dominate the local market, especially when they don’t have a point of difference for the product, they don’t necessarily “have more money”, and where there is precedent in this market at least that local businesses can hold up their own against foreign firms.

    1. fbnz Reply

      To clarify on (2), Groupon’s total funding is spread across the need to finance operations in 565 cities. So when you actually look at funding resources on a per city or per country basis, that number quickly dwindles, probably propotionately to market size and its importance to Groupon.

  2. Jasonying77 Reply

    Groupon is a scam, carefull everyone. I have been call there 0800 numbers for the last 2 weeks never get through. and email never get reply. If your Visa get over charged or something happen and you need refund you will get no help, this message probly will delete from groupon very soon as usual

    1. MattH Reply

      Groupon is not a scam, I have had no problem with customer service when I wanted to find out more information about a voucher I bought. They also have a local Auckland office number which is on their website and an office in Downtown Auckland.

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