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Groupon enters Aussie market

Wednesday, 22 December 2010 | By Michelle Hammond

Groupon has finally entered the Australian market, but local operators believe the US-based group buying website will struggle to compete in what is already an established market.

 

Groupon was founded in 2009 by chief executive Andrew Mason, and has since exploded in popularity with revenue reported to be in excess of $US350 million.

 

Although Groupon was the first company to develop the concept of delivering daily deals to subscribers on behalf of businesses, several key players have since emerged in Australia, making it a highly competitive market.

 

Major players in Australia include Scoopon, Zoupon, Jump On It, Spreets and Cudo.

 

Zoupon chief executive Adam Schwab describes Groupon as a brilliant company and the leaders in its industry, but this might not be enough to see it succeed in Australia.

 

“We’ve got established players here and they don’t have an advantage so it’s going to be tough for them,” he says.

 

Jump On It chief executive Colin Fabig says he’s surprised Groupon entered the Australian market under its own brand instead of partnering or through an acquisition.

 

“I’m very surprised they’ve tried to come in organically. I think it will be very hard,” he says.

 

Cudo chief executive Billy Tucker also predicts a tough time for Groupon if it plans on beating its rivals.

 

“America is known for supporting three leaders in any given market, and it’s no different here. But as long as they can give good deals [they will succeed] – it’s all about who has the best deals,” he says.

 

Dr Sean Sands, of the Australian Centre for Retail Studies at Monash University, says Groupon’s background in the US means it has the expertise to vie for a top spot in the Australian market.

 

“They can come into the market and try and be the best player. If they can be [the best player], they can potentially wipe out some of the smaller players,” Sands says.

 

“However, they’d need to partner with the product and services offerings that consumers want, get the best deals and get the best access.”

 

“My guess is they’ll be quite well cashed up and be able to come in and probably do a campaign to at least build awareness.”