World’s two biggest voucher sites add to the daily deal cacophony

Last week it was revealed by the latest Nielsen Online Retail Report that two thirds of online New Zealanders have received email alerts from daily deal websites, and a further 40 percent said they made a purchase from such sites in the past three months. Now two of the world’s biggest deal sites, Groupon and Living Social, are set to arrive and take some more of New Zealand’s discount dollars.

Coupon site LivingSocial made its Auckland debut last week, with Wellington and Christchurch following close behind. But although it’s new to the New Zealand market, LivingSocial is an old hand in the coupon game.

Launching in December 2009 and based in Washington D.C., the site has a bunch of big-name punters backing it. With a large market share in Australia, the US, UK, Canada and Ireland, it recently received $535million in funding from a mix of investors including Amazon and Lightspeed Venture Partners—taking its total backing to an excess of $900million.

But in a webscape brimming with daily deal sites, what makes this particular offering stand out? Living Social is banking on its “hyperlocal deals” to make the difference. In Auckland, for instance, it will segment deals into four regions: the north shore, west, city and south, as well as offering one premium city deal to appeal to everybody.

LivingSocial chief executive Colin Fabig says LivingSocial researches the needs of each city, and each area, to offer deals that reflect the passions of the community.

“By offering local deals, we are letting savvy shoppers try all the best experiences, located right on their doorstep. It’s a great way to find out about all the great places in your neighbourhood at no risk or upfront cost,” says Fabig.

Launching in December 2009, LivingSocial is second in the world only to Groupon—the US site that started the daily deal plague. Like LivingSocial, Groupon also has plans for New Zealand.

While LivingSocial has got itself up and running here, a confirmed New Zealand launch date for Groupon has yet to be announced, though the site preview for Auckland has already been prepped (it had to buy the domain name Grouponnz.co.nz after a bit of a domain squatting row).

Groupon originally launched in Chicago back in November 2008. It now operates in more than 500 markets across 44 countries, and at the close of last year, cofounders Brad Keywell and Eric Lefkofsky said no to Google when it offered US$6 billion dollars to acquire the company. Obviously, they have even grander plans.

The introduction of the two new players in the New Zealand market will no doubt prove competitive. According to a recent Wall Street Journal article, LivingSocial raised US$400 (NZ$500) million to expand and keep pace with Groupon.

Although the deals bring businesses a new round of exposure to customers, getting involved is generally a loss leader. However, we’ve heard the industry average for redemption rates is around 80 percent, so the 20 percent buffer of unredeemed vouchers helps ease that financial deficit. And shows how easy purchased—and forgotten—these deals often are.





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