The world is going gaga for social buying sites at the moment: Google was rumoured to have put in an offer of $6 billion for Groupon, Yahoo!7 just purchased Spreets for $40 million, APN has had a fair swag of success with its 50 percent stake in GrabOne and now Yellow has jumped on the bandwagon by snapping up group buying site www.groupy.co.nz.
Yellow acquired the business, which was set up six months ago by Wellingtonian lads Scott Kitney and Andrew Hunt, amongst much competition late last year (the price paid wasn't revealed, but given Yellow's well-publicised financial situation and rumours of more changes afoot, it seems to be a pretty ballsy move to be spending more cash before sorting out the larger issues). The founders will remain at the helm and will continue to operate the business.
As minority shareholder Lance Wiggs says: "In short, Yellow [which has over 300,000 business listings and more than one million total listings including residential] brings to Groupy the marketing muscle required to expand throughout New Zealand, while the core Groupy team will hop over to keep things moving at internet speed".
“Groupy’s a great new start-up brand with a bit of cool factor”, says Yellow digital director, Peter Crowe. “We’ll be introducing our advertisers to a new ad solution that will get them instantaneous and significant results if they feature in a Groupy unbeatable deal."
A re-launch of Groupy this week saw a brand new look for the site and a $1 Hell Pizza deal, which has been advertisied on Facebook and Stuff. And it's off to a good start: so far over 12,000 pizzas have been sold.
Like its group buying brethren, a massive growth sector overseas in recent years, Groupy features daily deals that can be purchased online at hugely discounted prices (usually between 50 and 90 percent).
By negotiating bulk purchases with businesses, Groupy is able to get heavy group discounts. And it's a win-win, really: consumers save lots of money and businesses make large sales and drive new customers through their doors.
This latest initiative is the latest in a series of attempts to modernise the Yellow product offering. And the group is certainly splashing plenty of money to try and get there, with chief executive Bruce Cotteril saying last year the Yellow/Yahoo!7 partnership, the committment to recruit one hundred new sales staff and a host of new digital enhancements were all part of a $40 million investment in the business.