Local group buying sites watching Groupon takeover closely, as site launches new platform for merchants

Speculation within the group buying industry is now reaching fever pitch, with local daily deals entrepreneurs saying they are closely watching developments in the United States regarding a suspected $US6 billion takeover offer for market leader Groupon from internet giant Google.

Local group buying leaders also say they have taken notice of a new model launched by Groupon last night, which allows merchants to create their own mini-sites on a daily deals page and offer discounts of their own, whenever they want.

“We are certainly keeping an eye on whatever’s going on,” Zoupon chief executive Adam Schwab says.

“This is a pretty high valuation for a non-listed, two-year old company. It will certainly provide some sort of legitimacy for it.”

Groupon last night launched a new concept that will allow merchants to create their own mini-sites and launch deals from those, instead of featuring as the site’s main deal of the day. The new concept, titled Groupon Stores, is essentially a copy of the new Facebook Deals feature that allows businesses to give out coupons whenever they want.

“Think of it as the online equivalent of a merchant’s physical storefront,” the company said in a statement on its blog. It says stores can now setup a permanent, free eCommerce presence, create offers whenever they want, submit deals through email and get customers to follow their own Groupon Store through a Twitter feed.

The company will pick a group of those best deals from Groupon Stores, and then send them to different users based on their personalisation technology – a move that Groupon president Rob Solomon told SmartCompany last month the company was considering.

The second announcement of the day was the introduction of a Deals Feed. This is a new section where deals are personalised and streamed throughout the day.

Similar to the News Feed on Facebook, the Deals Feed features the ability to connect your feed to Facebook and receive updates on what friends are doing, follow new merchants or comment on different types of offers.

“Personalisation, Stores, and the Deal Feed are our attempt to re-imagine things. How would we have built Groupon if we started with hundreds of thousands of relationships with the best merchants in the world, millions of customers, and a world-wide operation with thousands of people helping merchants create deals?”

But as Groupon doesn’t operate in Australia, the new features mean little for local users. But the leaders of local group buying businesses say the idea is definitely one they are considering introducing themselves.

“They’ve got so many merchants they can’t service them all,” Schwab says. “It reminds me of when Amazon opened its second-hand deals. It’s not them selling it, but they’re making a commission on it. Groupon has a good name and it’s a good way to get some extra market power.”

Colin Fabig, who runs daily deals site Jump On It, which just received a $5 million investment from Groupon rival LivingSocial, also says personalisation is the next big thing for these types of sites.

“We’ve got a lot of stuff like that in the pipeline and it’s something we’re considering. The difference is that when merchants are doing stuff for themselves, the offers won’t necessarily be as well crafted… but it’s something we’re considering and we’ve got a few new things coming up soon.”

These entrepreneurs are also closely watching a sudden ramping up of activity in the group buying space in America.

Not only is the Groupon board reportedly considering a whopping $US6 billion offer from Google, but the Wall Street Journal is also reporting that Amazon wants to invest billions in Living Social – the site which recently invested in Jump On It and will soon establish a local presence in Australia.

“Buying Groupon does seem to be much more of a revenue generating asset for Google, but it will be interesting to see how they can make a profit on it.”

“As for moving into Australia, I don’t know if the name is worth anything here. There are four of five solid companies here, and the fact that LivingSocial came through Jump On It is a telling sign.”

Fabig agrees, and says he isn’t sure that Groupon values the Australian market as much as some others in the United States and Europe.

“I wouldn’t be surprised if this is going to happen, but I’m not sure if Australia is that important a market to them. It’s not really a Google business – they don’t have that skill to speak with small merchants.”

“But there is great synergy for the two companies, especially when you consider what can be done on Google Maps and so on.”


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