Groupon reaches for the Star Deals in Australia

By Michelle Hammond
Wednesday, 16 February 2011

US-based group buying site Groupon has officially launched in Australia under the name Star Deals, with the company reporting it has already sold more than 100 vouchers.


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 is US-based, it will be managed in Australia by local operator Star Deals, with managing director Tobias Teuber saying the company will maintain a strong line of communication with its US parent.


Teuber says all business decisions will be made locally and Star Deals is solely focused on growing Groupon in Australia, with sales teams already "on the road" and manning the phones.


"We are very focused on service staff, and we plan to take a really intensive and long-term approach to (the relationship we have with) our partners and merchants," Teuber says.


Groupon chief executive Rob Solomon said Star Deals will "leverage the best practices Groupon has pioneered in more than 40 countries ... to change the face of local commerce."


Teuber says Star Deals has "lots of resources" in the background to keep its partners satisfied but the company's main priority is its customers because "it's all about deals".


Although he concedes that Groupon is facing strong competition from local, more established group buying sites, Teuber says he is confident Groupon can secure a substantial slice of the market.


But local operators believe the US-based newcomer will struggle to compete in Australia.


Zoupon chief executive Adam Schwab says Groupon is a "brilliant" company and the leader in its industry, but that might not be enough to see it succeed locally.


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


Technology analyst firm Telsyte expects the market for daily deals to be worth $242 million this year, predicting it to grow to $545 million by the end of 2014.


Telsyte analyst Sam Yip says the market leader is Spreets, which was acquired by Yahoo!7 for $40 million earlier this year and is attracting at least $6 million in gross revenue every month.


Based on its 35% cut of each deal transacted, its monthly net revenue is over $2 million. Spreets is followed by Scoopon, Jumponit and Cudo.

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