Smart50 rank: 9
Revenue: $45 million
Founders: Adam Schwab, 33 and Jeremy Same, 34
Head Office: Victoria
Year Founded: 2010
Frequent readers of SmartCompany will be well aware of the collapse of the Australian group buying industry.
One of the few standouts has been DEALS.com.au, which has consistently been a profitable business for founders Adam Schwab and Jeremy Same.
Begun in 2010 after its founders saw the success of American daily deals site Groupon, the business survived and prospered by expanding into new verticals while maintaining a conservative outlook.
It’s not easy surviving in the group buying space, Schwab admits.
“The intense competition (and subsequent market compression) was an enormous challenge, especially with a significant number of competitors acting to increase revenue, with little or no consideration of profit.”
DEALS.com.au has always played it safe – avoiding the expensive acquisitions that came back to haunt many of its competitors. Instead, it’s created a number of vertical sites, such as The Home, pop.com.au, Luxury Escapes and The Meat Merchant.
It hasn’t steered away from acquisitions entirely though. It bought Ouffer.com last year, a competitor of sorts, which focused on lifestyle and cultural deals. “It was an incredible challenge bringing together two quite different tech platforms with overseas based developers,” Schwab says.
In July, the company also bought Cudo.
The daily deal sector is famous for its inability to retain customers. So Schwab is proud that DEALS.com.au responds so quickly to its customers. “In terms of customer service, the group is market leading, with typical response times of less than one hour to written communication,” he says, adding that most of his competitors take two to five days.
“Without customers, and especially loyal customers, you have no business,” he says.
In the next year, Schwab has expansion on the cards. The business plans to grow its niche sites. But, sticking to the cautious credo that’s served DEALS.com.au well so far, in the core brands, he says growth will be “gradual”.