Source: digitaljournal.com

Although revenue in the first quarter showed barely any increase over the previous quarter, it was likely because people bought less during the Chinese New Year holiday, according to a research report released by Dataotuan (via Tech in Asia).

Leading market players in the industry continued to consolidate, with the top 10 sites taking up 94.7% of the market share, just a tad down from 95.3% in the fourth quarter of 2012.

Juhuasuan, a daily deals site run under the Taobao brand by China’s leading ecommerce company Alibaba Group, kept its leadership position in the market, while rival Meituan clung on solidly to its second overall position, as can be seen in the chart below.

However, Juhuasuan’s market share declined to 33.6% from 47.8% in the previous quarter, while Meituan saw its market share increase to 17.8% from 13.1%.

Dataotuan CEO Wenli Liao said Juhuasuan’s market share decline this quarter was because it had generated a lot more revenue in the previous quarter during the big 11.11 shopping festival held on November 11 to celebrate Single People’s Day, where the Taobao group generated a historical daily revenue of 19.1 billion yuan. Many merchants also promoted their online shopping deals on December 12 2012.

These reasons also saw the proportion of Juhuasuan product deals revenue decline to 62.7% from 88.1%.

On the other hand, Meituan’s proportion of local services deals climbed to 29.8% from 24.7%. The average price of a service deal was 179.7 yuan ($29.34), discounted by 57%.

The top five sites – Juhuasuan, Meituan, Dianping, Lashou and 55tuan – saw their combined market share decline to 77.3% from 82%, as Dataotuan noted that changes were likely happening among the third- to sixth-ranked websites.

Dining was still the most popular category in the first quarter of the year, accounting for 35.7% of the daily deal sites market.

Juhuasuan last month launched an overseas platform to cater to Hong Kong and Taiwan consumers, as the site and its owner Alibaba will be looking for growth in part, to stave off any future competition from Groupon.

The company has made moves to strengthen its position in China through a different daily deals website, called Gaopeng, the result of a joint-venture with Tencent. According to Dataotuan, the “New Gaopeng” – a merger of Gaopeng, Ftuan and QQtuan – “is not yet making a dent with 2.7% market share.” The data show that Gaopeng chalked up 2.7% of market share, up from 1.8% in the previous quarter.

Source: The Next Web

Other players, from daily deals site Groupon to Chinese e-commerce giant Alibaba, have also tried to leverage social ingredients to boost retail sales, drive user engagement, and build brand loyalty.

In a new report from BI Intelligence, we look at successful examples of businesses and business models for generating commerce via social media-based strategies, analyze Pinterest's success as a social commerce platform, look at Facebook's potential as a social commerce contender, and examine the e-commerce conversion and order value gap. 

But how did companies like Groupon, at one point called the “fastest growing company ever,” become the punchlines they are today? Observers cite poor management, faded novelty, and bad value propositions for merchants. Those are three really good reasons, and here’s another one: Daily deals customers just aren’t very loyal.

According to data released from Onavo Insights, 64 percent of LivingSocial users also use Groupon, and 25 percent of Groupon users also use LivingSocial:

Overlap between competitors isn’t always bad. Plenty of people use both Twitter and Facebook. But as Facebook CFO David Ebersman pointed out in this week’s earnings call, social networking isn’t a zero-sum game, and the number of people using these services is growing. The daily deals market on the other hand is shrinking, and Groupon and LivingSocial are only bleeding each other dry.

So who benefits from this backstabbing? Potentially startups like TikTakTo, an aggregator of daily deals. Because daily deals customers don’t seem to care about branding, the sector is ripe for a company like TikTakTo that merely provides a good user experience for finding the best deals, regardless of which company facilitates it. Like with Uber, I don’t care whether the car’s a Crown Victoria or a Lincoln Town Car, as long as it’s easy to hail and gets me where I need to go.

Of course that’s assuming the daily deals customer base doesn’t continue to shrink beyond the point of viability, which is hardly outside the realm of possibility.

Source: pandodaily

What do you think, are Daily Deal sites bleeding each other dry? Leave a comment below

Instead of offering deep discounts and being the middle man for activities and multi-day tours, the platform began offering once-in-a-lifetime experiences that are hosted by experts and celebrities. With the launch of Gurus, Zozi allows users to not only go on a kayaking adventure, but paddle down the river with a world-record holder — or ski in Tahoe with Jonny Moseley.

Although these kind of elite experiences (and celebrities) are tougher to supply and by moving away from daily deals it loses some of its appeal to the Average Joe, investors seem to be buying into Zozi’s new approach, likely because there’s more money to be made in celebrity-backed tours.

Today, the startup announced that it has raised $10 million in growth capital and debt as part of a Series B1 round. Investors include Launch Capital, 500 Startups, Forerunner Ventures, Par Capital Ventures, Silicon Valley Bank, Dolby Labs Chairman Dave Dolby and Seamless Founder Jason Finger, among others. The additional capital brings the company’s total financing to $17.5 million.

Zozi is currently available in more than 20 cities across the U.S. and Canada, providing trips to a host of international destinations, while offering customers the chance to buy products from outdoor brands like Timbuk2 and Marmot, for example. The startup now employs a staff of 40+, with teams dedicated to curating its elite experiences, which now include activities like backcountry snowboarding with Travis Rice (a three-time X-Games Gold Medalist), gourmet cooking lessons with Michael Mina, vineyard bike tours and hardcore training with Ironman champion Chris Lieto.

Going forward, Zozi wants to expand its roster of celebrity experts and increase its options across local experiences and gear. It was also look to improve its technology around booking and customer relations, while expanding deeper into eCommerce.

Zozi co-founder and CEO TJ Sassani said that the key to the startup’s success, especially given increasing competition from other venture-backed adventure startups like Peek, is to give its customers “a trusted source to help them with discovery and curation of the most authentic experiences and the latest gear, while giving merchants an on-brand channel to connect with targeted new customers, who will become repeat buyers and refer their friends.”

Whatever the case, high-margin, high-value experiences seem to be working for Zozi, but until it offers full-contact, backcountry blogging lessons with select TechCrunch writers, there’s still a long way to go.

Source: Techcrunch

LivingSocial, the company second in daily deals market share behind Groupon, has not fared well in recent months either. LivingSocial laid off 400 employees last November while downsizing in the face of a net loss of $560 million in Q3 2012.

While the fall of the daily deals industry has been well chronicled – from comparisons of Groupon to a Ponzi scheme to allegations of problematic accounting practices – what’s more intriguing is the future of the customer loyalty space.

Daily deals companies, essentially, take commissions from merchants in exchange for driving customers and sales to the business. Retailers have oft criticized this model, however, for delivering discount seekers instead of repeat shoppers.

To more effectively offer merchants discovery and customers deals, the customer loyalty industry has matured to produce another suggestion, the card-linked offer. Here’s why the card-linked offer is a potentially transformative technology:

1. Card-linked offers are incredibly simple. Digital coupons are loaded straight to a consumer’s debit or credit card. Consumers shop just like normal – with no slowdown at the register or confusion about coupon redemption policies – and the consumer will see the discount applied on his or her card account statement.

2. Card-linked offers solve problems for both the merchant and the shopper. The merchant benefits from the reach of its bank or loyalty program account partner and from the ease of discount implementation. It’s easy for the merchant to track the performance of its offer, as well, and the merchant only pays the bank or loyalty program a commission for offers actually redeemed.

Consumers avoid all cutting and printing of paper coupons, and avoid mail-in rebates as well. The rewards are simple – usually given back as a percentage of a shopper’s purchase – and there’s little confusion about stacking rewards.

3. Merchants can selectively target consumers based on purchase history. Macy’s, for example, could offer a 15% coupon to any shopper who spent $100 or more at Bloomingdale’s during the last billing cycle. These selective coupons can be more effective for the merchant than offering generic online coupons.

4. The benefits of the card-linked offer haven’t gone unnoticed. National banks, start-ups and venture firms have all embraced the card-linked offer as a potentially groundbreaking technology.

Bank of America has been one of the most vocal early adopters, running prime time ads for its BankAmeriDeals program, powered by card-linked offer company Cardlytics, that allows online banking customers to select merchant deals, shop, then get rewards back on their debit or credit card statements. Through this Bank of America partnership, Cardlytics has expanded its reach to over 200 million customers responsible for approximately $500 billion in spending. More than 4,000 merchants have already signed up for BankAmeriDeals, which has been only live for six months.

5. Other card-linked offer companies have been growing fast. Edo, a card-linked offer company out of Nashville, will extend 1 billion card-linked offers within the next 3 months, according to the company, a total that previously took the company four years to achieve. edo also has 200 million cards on-file at three of the top six financial institutions and at over 200 national and regional banks. Plink, another online to offline rewards program, recently announced that it had surpassed 50,000 physical locations for its members to earn rewards at.

6. This burgeoning popularity has gotten investors interested. Cardlytics has raised $51 million in funding, and edo has raked in $50.5 million. Other industry leaders in funding include Cartera Commerce with $43 million in funding and SavingStar with $18.3 million in funding.

Simply put, Groupon’s stock has plummeted in recent months and card-linked offer companies have been growing at a fast pace. For shoppers looking to keeping scoring big discounts even if daily deals fade, card-linked offers provide a technologically savvy opportunity for shoppers to get rewarded in the most seamless process to hit the market yet.

Source: Forbes

China’s top e-commerce player, Alibaba, also runs the nation’s leading daily deals site. Run under the familiar Taobao brand name and URL as Juhuasuan, the site is today expanding to include customers and daily deals in Hong Kong and Taiwan.

Centered around a new overseas site at hk.ju.taobao.com, the number of offers right now is very limited, but that will expand over time. The main Juhuasuan deals site has several thousand product listings at any given time, so it might be a while before relevant deals are made available to new users in Hong Kong and Taiwan. (UPDATED the stat about product listings to correct a mistake).

This new version of Juhuasuan will focus on deals for things like clothing, homeware, mother and baby products, consumer electronic accessories, and children’s toys. Travel and “lifestyle” deals will appear in a few weeks’ time, though it’s not clear if that will cover food/restaurants. But it will be an interesting challenge to Groupon in both Hong Kong and Taiwan.

The new site has ‘traditional’ Chinese characters, which is the script used in Hong Kong and Taiwan. Just last week we were talking to Daphne Lee, the director of Taobao international business, who told us how Alibaba is keen to expand its various e-commerce offerings to Hong Kong, Taiwan, Singapore, and across Southeast Asia, though there’s no word yet of the whole site being made available in English or other languages.

In today’s announcement, Daphne said:

[W]e firmly believe will enhance and complement the online shopping experience at Taobao Marketplace and Tmall.com for our more-than two million registered users in Hong Kong and Taiwan. In 2012, we continued to improve upon platform infrastructure and introduced new features such as the Alipay Card to make online shopping more convenient for Hong Kong and Taiwan consumers. Users can expect an even more diverse and comprehensive set of new and localized features and services to be rolled out in 2013.

This is the second consumer-oriented Alibaba site to venture overseas after the afore-mentioned expansion of the C2C Taobao shopping site. The Juhuasuan overseas service is promising delivery of its items in one or two days. For travel and lifestyle deals, QR codes or serial numbers will be employed so that shoppers can collect their deal from a retailer.

In our most recent daily deals industry stats, Taobao Juhuasuan has 47.8 percent market share by revenue – that’s way ahead of the indie Groupon clone Meituan with 13.1 percent share.

Source: TechinAsia

The Chicago-based company may also do some shopping of its own in India and is looking at acquiring companies which are complimentary to its own business—such as fashion, food and beverage and online ordering.

“Let us be clear, both us and the industry are just scratching the surface of the 300 million-strong middle class. More than 20 per cent of our deal redemptions are done through the mobile interface, which is our next focus area for growth,” said Kal Raman, Global COO, Groupon, while addressing reporters here on Thursday.

“The inorganic route is promising and open for us. As long as whatever company we acquire adds value, we will be looking at it,” he added. The company, at present, has tied up with over 15,000 merchants (small, medium and national).

Groupon India, which has three offices in the country, recently set up a R&D centre here—which is the company’s fifth such centre worldwide.

“The new research centre currently has around 200 employees and will work on not only developing software for our global operations but also help in supply chain management. My personal wish is for it to become one of our biggest,” Mr. Raman said.

Groupon entered the Indian market in 2011 with the acquisition of Kolkata-based SoSata, which was eventually rebranded as Groupon India.

Source: TheHindu

So, what happened? Here are four factors that have contributed to the decline of the daily deal … and one that could help it survive.

1. Spam

Groupon spawned a glut of copycat services. And let's face it, once you signed up for a pile of deals sites, that meant a pile of e-mail in your inbox every day.

As a harried digital world began dreaming of the Internet's white whale — "Inbox Zero" — people got tired of looking at one offer after another, especially at a time when some folks found their paychecks stretched so thin that even 25% off of a restaurant meal was outside their budgets.

The barrage got so bad that at least one tool was created to combat it. UnsubscribeDeals.com offers one simple service: the sometimes-tricky task of getting you off of the mailing lists of major deals sites. You can then opt for a single e-mail, weekly, with personalized offers.

"The industry, and Groupon specifically, received a lot of attention over this 18-month period. They got a lot of press, they spent a lot of marketing dollars getting users," said Unaiz Kabani, product manager for daily-deals analysts Yipit. "What they did is sign up way more customers than are going to actually be interested in the product.

"Those are the ones that are just kind of viewing the e-mails as spam."

2. Irrelevance

With four or five, or more, deals hurtling toward you every day, what are the odds you're going to be interested in most of them? The law of averages says they're not very high.

Don't need your teeth whitened? Bungee jumping not your thing? Not sure your slow-pitch softball team would appreciate you skipping practice for Bikram yoga?

If you have to wait weeks for something interesting, eventually you'll lose patience. (Note: See item five for hope on this front.)

3. Angry businesses

Research done by Yipit showed that about 90% of businesses that used Groupon and LivingSocial were satisfied with the experience, Kabani said.

But in the daily-deals heyday, stories started surfacing from businesses, particularly restaurants, saying the digital coupons were a bad bargain.

Customers who showed up for a deeply discounted meal never came back to pay full price, presumably having moved on to the next bargain. Deal-seekers were regularly bad tippers.

One cafe owner in Portland said she lost $8,000 on a Groupon deal. At the time, businesses couldn't cap the number of Groupons the site could sell, and she got clobbered by tons of people taking her up on an offer for $13 worth of service for $6.

(Mason, to his credit, heard her story and offered to "make things right.")

As we noted, that wasn't the majority of businesses. But a spate of stories like that made some merchants think twice about signing up.

4. Deal fatigue

The Internet is a "been there, done that" sort of place.

While 2010 and 2011 brought us stories of daily-deal addiction, 2012 and 2013 have brought more about daily-deal burnout.

From "Draw Something" to location-based games to those funny Facebook quizzes, what's hot today on the Web can be virtually gone tomorrow.

We're looking at you, "Harlem Shake."

5. Hope for the future?

Adapt or die. It's the law of the jungle, and the digital marketplace.

Kabani notes that Groupon actually had pretty good results last quarter. One thing they've done is become more of a buffet and less of a blue-plate special. Users can now go to the Groupon site and search for something they're actually interested in, rather than just waiting to see what pops into their inbox.

"Instead of just one daily deal, they're creating this open-ended marketplace that's done really well," he said. "Say you're looking for a massage deal or to get a haircut. You can go to Groupon now and find something like what you're looking for."

As noted above, Scoutmob scored a few million dollars in investments last year by positioning itself as a more well-rounded mobile company than some deals sites.

"The industry matured really, really quickly; that's kind of when you saw that hyper growth period," Kabani said. "It's obviously not in that space any more. They're in the optimization mode … trying to understand how to best optimize their subscribers."

Source: CNN