Daniel Tay is the Content Strategist at ILOVEDEALS.SG, Singapore’s leading deal aggregator/coupon portal. He is also a freelance writer, and his works and musings can be found at danieltay.me. Follow him at @legendt.
Is the daily deals space going down? What can existing players do?
2012 was not a good year in the daily deals space. Locally, at least 20 deal sites closed down within the year, with certain sites such as Mocca Perks biting the dust in April 2012 andOutlet Singapore going bankrupt and bowing out of the race not long later in August 2012.
Internationally, even the top deal sites were not spared, and were feeling the heat. Groupon’s share prices slid to US$5.25 per share in October 2012 (down from a high of US$ 31), and slumped even further early this year, resulting in the “firing” of former Groupon CEO and co-founder Andrew Mason. At about the same time, LivingSocial posted a net loss of US$566 million as of October 2012, and fell to about a quarter of their 2011 value in a recent financing round (down to US$1.5 billion). All in all, certainly not a merry year in both the local and international daily deals scene.
Major Deal Sites Continue to Dominate
In Singapore, however, the top deal sites have been doing relatively well. According to an analysis done by I Love Deals Singapore, the top five deal sites have taken 91.2 percent of the overall daily deals revenue in 2012, with Groupon Singapore taking a commanding lead. Within January to March 2013, Groupon Singapore received almost twice as much revenue as the second-placed DEAL Singapore, and almost eight times as much as the fifth-placed Streetdeal.
Meanwhile, both Groupon Singapore and DEAL Singapore continued to surge ahead with the launching of their respective brick-and-mortar stores, providing even more competitive customer service. Clearly, with such behemoths marking and expanding their territory locally, small and medium deal sites have and will continue to find it hard to enter and compete in the local daily deals space.
Hope for the Minnows: Product Deals
However, there is hope for them yet. Newcomers Honeybay entered the daily deals scene back in 2012, and have successfully broken into the upper echelons within a year, coming in at third-place in terms of revenue received between January to March 2013. Honeybay seems to be doing something right – this could possibly be due to their focus on product deals.
Back in 2011, it was predicted that product deals would be on the rise in the daily deals space. As of March 2013, this prediction seems to be coming true. Here is an infographic created based on research done by I Love Deals Singapore.
With the success of Honeybay in focusing on product deals, it is expected that the other daily deals sites will begin to follow suit in the coming year.
Besides product deals, there are two up-and-coming features that appear to be catching on with customers at the moment – mobile platforms and instant deals.
Many daily deals sites such as DEAL Singapore, Groupon Singapore, and I Love Deal Singapore have already rolled out their mobile platforms, and other sites are expected to follow. And why not? A mobile platform provides added convenience for the customer in browsing and ordering deals on-the-go. Given the fact thatSingaporeans own the most smartphones in Asia Pacific, a mobile platform would definitely lead to increased readership and, hopefully, conversion rates.
The statistics certainly support this trend: From 2012 to 2013, the number of visitors that browsed the I Love Deals Singapore mobile site increased from 26 percent to 38.5 percent, and the numbers are expected to go up in the coming year.
With the increase in mobile platforms, it makes sense that instantly redeemable deals should follow. Compared to two years ago, daily deals are now extremely commonplace – so much so that customers are very selective in buying deals. Two years ago, a customer may buy a deal simply because it was 50 percent off (it was a big deal back then). Today, it is not uncommon to see 90 percent deals day in and day out. Because of this, customers tend to buy only deals based on necessity, and not just due to the discounted price.
If mobile platforms are in play, the next step would be to allow customers to purchase vouchers on their smartphone and use the mobile platform to redeem it instantly. In this way, customers can buy and use deals as and when they need them.
Moving with the Times – Deals in the Mobile Age
Perhaps, the reason why the daily deals space has been doing so badly in recent times is because it is slow in keeping up with the times. In the mobile age, mobility and time factors weigh heavily in the customer decision-making process. Good discounts have become a given – customers want to be able to buy them wherever they want to, when they want to. For this reason, it would be prudent for deal sites to work on their mobile platforms for the year 2013.