E-tailers look to cash in on Groupon clones

Summary:Conventional online businesses say daily deal portals complement their primary business and point to innovation as means to ensure long-term sustainability.

A growing number of online retailers are turning to daily deals as a "win-win" business model that complements existing marketing mechanisms and benefits both consumers and merchants.

Not only have various Groupon clones such as deal.com.sg and bigdeal.sg sprouted in Singapore, conventional online retailers--including travel agent AsiaTravel.com, and luxury goods retailer reebonz.com--have also launched separate daily deal portals hawking their products at major discounts.

AsiaTravel's daily deals portal, atCrazy.com, touts a range of travel offers including hotel packages at 60 percent discounts, while Reebonz City offers dining promotions and event tickets at discounts of between 10 and 95 percent.

Reebonz's spokesperson, Sharanjit Kaur, told ZDNet Asia in an e-mail interview that its daily deals portal serves as "a good complement" for its products and business.

Kaur explained that the company aims to make luxury goods affordable and promote this lifestyle as "more than just fashion". The deals sold on Reebonz City are a "natural extension" of its primary business, she added.

Unlike other group buying sites, deals on Reebonz City can be utilized immediately once a consumer pays for them. The company provides detailed product information to help customers make their purchase decisions, unlike the "impulse buying" mentality generated by Groupon and its clones, Kaur noted.

Online food guide and review site, HungryGoWhere, also recently began selling online deals via its subsidiary site, HungryDeals, offering promotion coupons for a fee ranging from S$3 to S$20 which entitles consumers to at least 30 percent discount when they order off ala carte menus at participating restaurants.

HungryGoWhere's managing director, Dennis Goh, believes its selling model provides consumers "far greater flexibility" when eating out, giving them the opportunity to try out a wider variety of dishes. He said this model is "significantly different" from other group buying sites in the market.

Goh noted: "Unlike these other sites that rely crucially on impulse buying, our model is based on our [consumer] community researching these restaurants then deciding where they want to go before buying the discounts."

He added that customers are free to order any dishes as the coupon does not restrict them to a particular item at the point of purchase.

Goh is betting on HungryGoWhere's popularity as one of the market's pioneer restaurant reviews sites to bring similar success to the new HungryDeals site. "Food and beverage (F&B) deals tend to run quite well given that most people need to eat on a daily basis and, hence, look out for similar deals," he said.

Teething consumer woes
The growing variety of deals may have given the online community another avenue to shop, but one user is not buying into the "frenzy" just yet. Management consultant, Jean Wong, is wary of online deals after signing up for an online travel package that eventually failed to materialize.

Like 3,000 others, 31-year-old Wong jumped on a deals.com.sg offer from a Singapore-based travel agent which hawked an air-plus-hotel package to Bangkok, Thailand, for S$188.

"The terms and conditions weren't clear so when I enquired about travel dates, the agency said they weren't available and offered to book me with another airline which I did not want. To their credit, the agency admitted they weren't able to cope with the overwhelming demand and refunded us the money in a matter of days," she said.

Others who were not informed about the refunds took to Facebook to rally support from other affected consumers.

Wong said she will avoid similar travel deals on such sites, even if they are offered by reputable travel agents.

A spokesperson from atCrazy.com, however, said some deals "are just too good to pass" and while consumers are wary, incidents such as those encountered by Wong will not stop them from participating in future deals.

Innovation for sustainability
According to digital marketing site Incitez, which posted a report on daily deal portals in Singapore, Groupon came out tops in terms of revenue and online traffic. The report, however, noted that daily deal offerings in the city-state lacked innovation.

It pointed to Livingsocial, a site that offers deals on family-friendly activities and LevelUp, a portal that offers increasingly better deals to the same consumer as part of efforts to cultivate user loyalty, as those that stand out from the competition.

Goh is also betting on such innovative deployment to help HungryDeals take off.

"We have built up relationships with F&B merchants over the last four years. They trust that we have created a specially tailored business model that benefits both restaurants and food lovers, sustainably over the long term," he said.

Topics: IT Employment, Browser, CXO, Social Enterprise

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