Monday, June 6, 2011

Look in the rear view Big G , LS and FB are coming !

With the recent IPO offering plans of Groupon, Living Social’s acquisitions of Let’s bonus and jumponit, and the launch of Facebook deals, the social couponing market is gathering more momentum than ever. The ‘Market Analysis’ of this industry according to me falls in the ‘Blink and a miss’ category with all three companies looking solid.

Among the herd of clones that have emerged in Groupon’s space, none are as strong as LivingSocial. Since its group deals launched in December 2009, the company has garnered a total of $232 million in funding — $175 million of it from Amazon. This figure might be dwarfed by Groupon’s pile of $950 Million and its rumors of a mammoth $25B IPO plans, but its enough to make Groupon feel the heat.

With the industry estimates on the rate of growth of both companies, LivingSocial’s sales pie will overtake Groupon as soon as early 2012. However, the Groupon camp does not seem to be too worried with some insider news of a leaked memo spilling the beans on their annual revenue growth from $33 million in 2009 to $760 million in 2010. Groupon seems to have much confidence on their local sales-force which they believe is their competitive advantage. Livingsocial however is believed to have a much better customer satisfaction rating between the two. This might be attributed to the fact that Amazon, a key investor for Living social has always been a highly customer oriented company.

The market was interesting enough and BAM, enters the ‘Big Daddy’ of social networking, Facebook Deals with its customer base bigger than the 3rd largest populated country in the world. Facebook clearly has an unmatched community effects with most of the youngsters active on this site everyday and their chances of picking deals with their friends being very high.

It remains to be seen however that would these three companies settle with a part of the pie which according to a report from Local Offer Network would grow 138% to $2.7 billion in 2011 or will we see a showdown with someone taking the crown ? Wait and watch I say ! One thing is certain, “we” the consumers are loving the discounts !!

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