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Every article and comment I read on this topic seems to assert they're doing badly because they're in a business with "no barriers to entry". Building an email
by arbuge 14y ago
Every article and comment I read on this topic seems to assert they're doing badly because they're in a business with "no barriers to entry".
Building an email list of millions of people seems like a formidable barrier to entry to me. Particularly so when the CPC cost for anything even vaguely daily-deal related has shot through the roof over the last couple of years and is in the $5-$10 range per click now. It usually takes several - several tens of clicks to convert to an email subscription, depending on landing page.
Not to mention the cost of hiring and organizing thousands of salespeople nationwide.
I don't recall precisely, but I believe that LivingSocial & Groupon are still far bigger by market share than the rest of the players put together... that's not what you get in a space where barriers to entry are low.
- marknutter 14y agoSure, it's hard being the first, but after Groupon became popular people started actively looking for other deal sites. It became very easy to throw up a site and gain a lot of traction. I helped one of my clients do just that and they continue to see a lot of traffic to this day.
- arbuge 14y agoHow exactly did you get that traction? Curious as to what I'm missing... doesn't look so easy to me.
- melvinmt 14y agoVerticals and localization. I believe there are 50 Groupon clones in Turkey alone and you can find a deal site in every single niche you can think of.
- omgtehlion 14y agoIn Russia too: everyone (and his dog) makes these sites.
- ngsayjoe 14y agoIn Malaysia, there are over 80 groupon clones at some time ago.
- maxprogram 14y agoThis explains why Groupon & LivingSocial have roughly maintained their market shares: http://go.bloomberg.com/tech-blog/files/2012/08/livingsocial.jpg http://go.bloomberg.com/tech-blog/files/2012/08/livingsocial... I think the primary reason for their "downfall" was not lack of barriers to entry (there were none at first, but once industry is established, there are as you mentioned), but a much smaller market overall. i.e., the "group coupon" model was very popular for a short time, much more so than its long term steady-state usage.
- wnight 14y agoThe email list is the easiest part - just copy Groupon's. By the very nature of the business they publish a list of everyone they deal with. Scrape it.
- wnight 14y agoThis is why Groupon isn't worth much though. There are no legal, ethical, or technical reasons for not contacting everyone who uses them and offering them a better deal. The beautiful thing about e-coupons is that they don't cost anything to issue so there's pretty much no risk to the merchant for trying another company. The only lock-in possible in this industry is customer satisfaction through value, which Groupon is notoriously bad at.
- yalogin 14y agoI thought their biggest problem was that they do not provide any advantage to the merchants. I have read numerous articles about how the merchants greatly regretted their decision to give groupons but not one about how great it turned out for them.