Some people may think of LivingSocial as the little brother to daily deal site Groupon, and today LivingSocial followed in its big brother's footsteps by buying abroad to expand its business.
But the would-be brothers are different.
Think of Groupon as the brash, big Chicago joker with 30-year-old Andrew Mason, a man who reminds acquaintances of the legendary absurdist comedian Andy Kauffman, at the helm.
LivingSocial is the buttoned-down Washington, D.C.-type, appealing to a smaller, more affluent crowd. That could be because its leader, 29-year-old Tim O’Shaughnessy, who worked as a waiter while attending Georgetown, is the son-in-law of Washington Post Co. chairman Donald Graham and counts as a mentor and backer AOL founder Steve Case.
LivingSocial's shopping spree aims to boost its overseas growth. The privately owned company didn’t release the financial terms of the deals. Joining the company's umbrella are DealKeren and its parent company Ensogo, giving it a footprint in Indonesia, Thailand, and the Philippines. LivingSocial also purchased GoNabit, which extends its reach to the Middle East.
“I think what’s interesting for LivingSocial is that this is a global marketplace,” Jack Maas, senior vice president for corporate and business development at LivingSocial, told Portfolio.com, “The business model resonates everywhere.”
And at least when it comes to the purchase of GoNabit, LivingSocial may have beaten out Groupon, writes Neal Ungerlieder of Fast Company:
To gain some perspective, Maas said that today isn't the first time that LivingSocial has bought other companies. In fact, it's bought eight. He added that each of the purchases announced today meshed with LivingSocial’s culture of having local salespeople work closely with local merchants on the deals offered.
And there are other contrasts between LivingSocial and Groupon. LivingSocial’s audience is smaller, said Peter Krasilovsky, vice president and program director at researcher BIA/Kelsey. At the same time, that audience is richer, he said.
LivingSocial is also stronger in the South and far West, while Groupon dominates the Northeast, said Jeffrey Grau, eMarketer principal analyst covering e-commerce.
Both analysts said LivingSocial beat Groupon to the mobile deal, in which instant deals to nearby businesses could be offered, though Groupon is closing the gap on that front. And LivingSocial differentiated itself from Groupon by offering different channels for deals, for travel and family needs, for instance.
Still, for all their differences, for both companies, it makes sense to go international.
LivingSocial and Groupon are both active in U.S. markets, along with hundreds of other smaller daily deal sites. Google and Facebook are getting into the game too.
“I think that in the U.S., the daily deal is quickly reaching saturation,” Grau said. “There’s way too many players in this market to begin with.”
But the would-be brothers are different.
Think of Groupon as the brash, big Chicago joker with 30-year-old Andrew Mason, a man who reminds acquaintances of the legendary absurdist comedian Andy Kauffman, at the helm.
LivingSocial is the buttoned-down Washington, D.C.-type, appealing to a smaller, more affluent crowd. That could be because its leader, 29-year-old Tim O’Shaughnessy, who worked as a waiter while attending Georgetown, is the son-in-law of Washington Post Co. chairman Donald Graham and counts as a mentor and backer AOL founder Steve Case.
LivingSocial's shopping spree aims to boost its overseas growth. The privately owned company didn’t release the financial terms of the deals. Joining the company's umbrella are DealKeren and its parent company Ensogo, giving it a footprint in Indonesia, Thailand, and the Philippines. LivingSocial also purchased GoNabit, which extends its reach to the Middle East.
“I think what’s interesting for LivingSocial is that this is a global marketplace,” Jack Maas, senior vice president for corporate and business development at LivingSocial, told Portfolio.com, “The business model resonates everywhere.”
And at least when it comes to the purchase of GoNabit, LivingSocial may have beaten out Groupon, writes Neal Ungerlieder of Fast Company:
GoNabit, which operates in the United Arab Emirates, Kuwait, Egypt, Lebanon, and Jordan, became one of the most popular coupon sites in the region due to a slick Arab-language interface and the opening of aggressive sales offices in several countries. In the past year, GoNabit embarked on a massive hiring drive while coping with regional difficulties in payment processing caused by poor infrastructure.
Groupon has struggled to establish itself in the Middle East, with sales reportedly lagging significantly behind local competitors such as GoNabit and another popular site, Cobone. Both sites adapted the online coupon business model to the regional market and aggressively approached local companies. By the time Groupon expanded to the region, there was precious little market share to acquire.Groupon went on its own overseas buying spree while talking with Google and ultimately turned down a $6 billion acquisition offer from the search giant. Among Groupon’s purchases at that time were uBuyiBuy, Beeconomic, and Atlaspost. That allowed the Chicago-based daily deal site to launch Groupon Hong Kong, Groupon Singapore, Groupon Philippines, and Groupon Taiwan.
To gain some perspective, Maas said that today isn't the first time that LivingSocial has bought other companies. In fact, it's bought eight. He added that each of the purchases announced today meshed with LivingSocial’s culture of having local salespeople work closely with local merchants on the deals offered.
And there are other contrasts between LivingSocial and Groupon. LivingSocial’s audience is smaller, said Peter Krasilovsky, vice president and program director at researcher BIA/Kelsey. At the same time, that audience is richer, he said.
LivingSocial is also stronger in the South and far West, while Groupon dominates the Northeast, said Jeffrey Grau, eMarketer principal analyst covering e-commerce.
Both analysts said LivingSocial beat Groupon to the mobile deal, in which instant deals to nearby businesses could be offered, though Groupon is closing the gap on that front. And LivingSocial differentiated itself from Groupon by offering different channels for deals, for travel and family needs, for instance.
Still, for all their differences, for both companies, it makes sense to go international.
LivingSocial and Groupon are both active in U.S. markets, along with hundreds of other smaller daily deal sites. Google and Facebook are getting into the game too.
“I think that in the U.S., the daily deal is quickly reaching saturation,” Grau said. “There’s way too many players in this market to begin with.”
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