I actually did not know what Groupon was until recently. I am an eBay member. As a member, every week I receive deals from eBay letting me know I can use a discount in a lot of things or discounts on fees, the usual. This week I got an email from eBay saying Groupon was selling a $15 dollar coupon for $7 dollars. Thanks to Groupon, I bought a $20 dollar Blu-ray movie (with shipping) for $12 dollars. I know that $8 dollars is not that much but savings it’s always good.
After getting my $8 dollar discount, I decided to check what else Groupon has. I was impressed with all the discounts they have. I found discounts anything from hotels to racing car lessons. After seeing these discounts I wonder how does Groupon work and how could the company giving the discount afford to do this? Simple, Groupon will get a group of people to get a discount in one place. The company can afford to do it because they are getting a bigger volume of sales at one period of time.
I was thinking… I know a lot of people from work, from Facebook, and from school so why don’t I do the same as Groupon? I can contact a company and let them know that my friends and the friends of my friends would be going to their business in the same week. Also, I thought I could probably get some type of compensation from that company… you know just because I just brought over 100 people to their business.
After reading this article in the New York Times I guess I was not the only one that thought of this. There are a lot of Groupon copycats; copycats that are themed if you are gay, African-American, a business owner, and Jewish. There are probably more out there but that's all I could find.
The only difference between these sites and Groupon is the amount of members they have. Groupon has 60 million subscribers and the others… don’t. The only copycat that can compete with Groupon is LivingSocial with 10 million. In addition, it was reported that Groupon declined a $6 billion dollar buyout from Google. Also, LivingSocial had an investment from Amazon for $175 million.
I guess I was late on my idea. However, I would like to see how long this Groupon fever continues and how long it would last… Not long, Give another year or two until Facebook comes out with their own and it would take over the market.
That's the Truth,
Mauricio
Sources:http://www.groupon.com/deals/ebay/?affiliate_id=EBAYDEAL&utm_source=EBAY&utm_medium=CPC&utm_campaign=EMAILWAVE2
http://www.nytimes.com/2011/03/10/business/smallbusiness/10sbiz.html?_r=2&scp=5&sq=groupon&st=cse
http://www.businessinsider.com/livingsocial-interview-2011-2#ixzz1GudPnaQe
I knew there were Groupon copycats out there but I didn't know their were such specific ones like for gays, African American's and Jewish people. Its amazing what people will come up with. It will be interesting to see if any of these copycats can really pose a threat to Groupon.
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ReplyDeleteMauricio I would have to disagree with the notion that if Facebook comes out with the same concept that it would doom Groupon because the same thing is starting to happen with Netflix. Warner Brothers has made an exclusive deal with Facebook to stream movies but there are some drawbacks.For example with Facebook you have to pay per movie rather than an unlimited library of movies you can stream from the Netflix library. Also the movies you purchase for streaming on Facebook are only good for about 48 hours.
ReplyDeleteI do agree with you that the Groupon bubble may burst, but I think it will come when businesses decide that they can offer the same service without having to use a middle man. Big companies like Facebook and Google do pose threats to these other companies like Groupon, but just like with Netflix, Redbox, Hulu, and all of these other companies that providing streaming services/video rentals you will always have a niche market.
@ Christina. I know how crazy it’s that an idea can blow up like that is. However, I did not find a Latino Groupon. I might have to get started on that one.
ReplyDelete@ Leonard, you are comparing apples to oranges. Netflix it’s doing well because it has contracts with studios like Disney/Pixar, Lions Gate, and Columbia Pictures. Pretty much the same studios Starz and Showtime have deals with. That is the reason why Netflix show Series like Weeds, Dexter, Spartacus, and pretty much all the popular shows Showtime and Starz have. If Netflix doesn’t have a major studio it’s fine. In addition, Warner Brothers is a HBO/Cine Max studio and they are not going to let Netflix take over. If the Warner Brothers give the right to Facebook; it would not be a treat to Netflix, because of all the other studios they have. In addition, Netflix subscription is only $8. HBO or Cine Max subscription averages over $14 each nationally. I know this because I work for the local cable company.
I DO think Facebook it’s a treat for Groupon. Unlike Netflix, Groupon and Facebook have no membership fee. Facebook has 500 million people all over the world not just in the US. If Facebook does a Groupon around the world it would be done for Groupon.
That’s the Truth,
Mauricio
People always have to come out and not only copy an idea but make it into a group like Gay or Black or White, etc. It is so ridiculous. Yes Groupon is huge but if you have an idea you can always follow it and you never know you can end up beating Groupon someday. I think if Groupon doesn't sell to Google then Google will soon make their own system and beat them anyways. Can you imagine if Google put a simple little add for their new Groupon copycat system on their homepage? Everyone would switch over...it's as easy as that.
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