Are daily deals / group buy sites dying?

scotty on 30/05/2013 - 09:39

Saw this article from Sydney Morning Herald this morning. Are daily deals dead?

At the peak, more than 80 group buying sites were operating in Australia. But major consolidation and some failures have seen deal site numbers fall to around 30 still operating.

Between January and March 2013 Australians spent more than $115 million on group buying sites, according to the latest Online Group Buying Study by technology analyst firm Telsyte. This represents a decline of 7 per cent on the same period in 2012, when there were more players in the market.

$115 million spent on daily deal sites last quarter — I think it's far from dead but it's certainly a downward trend. However my question is — is it stabilising due to consolidation, or is that sector dying?

We aren't "technology analyst firm" and the only data I have on hand is our deal postings. We do flag daily deal / group buy sites so it's easy for us to just do some query against that sector. Here's some trend over the last 24 months:

Year Month Deals Sites Avg Votes
2011 5 82 20 5.06
2011 6 75 18 4.56
2011 7 55 14 4.90
2011 8 95 20 8.56
2011 9 58 18 10.96
2011 10 54 17 5.38
2011 11 50 19 10.68
2011 12 34 10 14.91
2012 1 32 14 8.71
2012 2 45 23 5.48
2012 3 44 16 18.88
2012 4 53 20 9.09
2012 5 57 17 15.05
2012 6 56 17 10.51
2012 7 48 16 4.12
2012 8 57 18 4.52
2012 9 44 15 3.84
2012 10 40 15 3.45
2012 11 34 10 8.44
2012 12 33 9 9.57
2013 1 31 9 6.48
2013 2 34 10 7.94
2013 3 27 10 3.62
2013 4 25 10 8.32
2013 5 48 12 8.29
  • Deals — the number of deals posted in that month
  • Sites — the number of unique daily deal sites posted in that month
  • Avg Votes — the average number of votes per deal posted

Number of deals has certain gone down since late last year, although it's probably due to smaller number of sites. Dead? Certainly not. Dying? Maybe still a long way to go.

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closed Comments

  • CyberMurning on 30/05/2013 - 10:16
    • they are spamming people with lots email, repeating current deals
    • doesnt want to take responsibility when the customer doesnt get the deal as advertised
    • took too much commissions / fees (i heard)
    • Fishingman1 on 30/05/2013 - 10:38

      True erwinsie
      You must show at least a 40% off from srp
      Then they require no less than 40% margin.
      They have sent many small businesses to the wall.

      • CyberMurning on 30/05/2013 - 12:07
        +1

        sent many small businesses to the wall.

        wall=bankrupt? how come. i know the margin high but the owner should calculate everything before hand, and do not go ahead if he will making loss (or otherwise already prepared for the loss as a marketing expenses).

        • georgedeka on 30/05/2013 - 15:55

          It was part of the marketing spiel, expect that only 50% of people will claim. However when 80/90% do they are stuffed.
          Also, they were selling on back on people will come back, not true.

  • retiredfeline on 30/05/2013 - 10:52

    Yup, going down. Will be gone in a couple of years unless they find a better model.

    http://files.ozbargain.com.au/upload/21340/16647/group_buys_…

  • Almost Banned on 30/05/2013 - 12:56

    I am not suprised nor disappointed to hear this.
    After having bought a few times from sites like this I rarely would now.
    Firstly, the economy is crap generally and many people (myself included) are not spending the way they used to.
    Secondly, too many of the supposed 'deals' turned out to be rubbish - sometimes the businesses got burned, more often the buyers got burned.
    Remember there was talk when this phenomenon first hit it would be the next big thing.

  • bin555 on 01/06/2013 - 14:44
    +1

    Interesting results scotty in terms of deals published. As you aware we started our site late last year as deal aggreator. I was overwhelmed to see how many deals are actually published. I assumed it was maybe 4-5 deals per day from each site but from 7 top sites (Groupon, Cudo, Ourdeal, LivingSocial, Spreets, etc) we were collecting literally 1000-1500 deals each month around Australia. That is a big number and obviously you would loose quality.

    Personally just looking at data I have found following:

    • Retail Deals (eg. umbrella, harddisk, scarf, etc): Being ozbargainer myself, I rarely come across any retail deals that are genuinely cheapest price.
    • Restaurants: I must admit I buy this the most. Its just to get a bit of variety to try new places.
    • Activities/Tickets (Eg. Half price entry to tickets, skydiving, kids play area): These are actually good and probably the most genuine deals.
    • Services (movers, car mechanic, etc): These ones are a bit of hit and miss. These have biggest likely hood where the underlying supplier is not able to deliver. However, if it works then you have saved a lot of money.
    • Travel (eg. Holidays): I have personally been reluctant to every buy these due to my experiences with service deals. But having said that lots of people obviously buy them. I just dont want to take a risk of ruining my holidays. I get great deals directly via Travelzoo anyways.

    If you interested we did detailed analysis on deal data in this article: http://www.dealon.com.au/articles_details.html?article_id=4

    Spreets semi shutdown few months back. They now display deals from Ourdeal and Groupon instead of their own.

  • voteoften on 08/06/2013 - 02:01

    I estimate that in 2011, I spent over $10k on various group buy sites. This year, it'll be somewhere between $1k and $2k. It just depends on what they offer. If they offered good value on things I can book and use, I'd be happy to spend $10k or more a year. A holiday could easily bump it up, if I could find a suitable one. Due to being busy, having a lot of high quality food pushed my way and cooking more, I am not eating out as much.

    The heyday is over. I remember being at a CBD beauty salon in 2011 or 2010 using a group buy deal, desperately trying to get reception to check the scoopon deal at noon. I got on around 1220pm and it was sold out. A deal for whatever you wanted drinks (inc grog) and food. It was $100 of value for $29. I would've bought the maximum, whether it was one voucher or 10.

    If the same deal came up now, I might buy 2. Now those high value deals do not come up. You may get the same alleged discount, but it is for prescribed items, many of which I do not eat, like garlic bread.

    The deals are more restrictive or less of a discount. Sure, you might get 70% off, but it is off of what the maximum menu items you might possibly order. You may not want those items. On the "buy whatever you want" deals, it is about 50% off, at least here in Perth.

    I am not interested in spa package deals or massages. From my experience, the quality just wasn't there. If a beauty supplier that doesn't appear too dodgy offers $20 microderms, $50 RF treatment or $130 fraxel laser, I'm there. The manicures, facials, massages, peels are just a pain in the ass, regardless of price.

    I will still do hair deals because I have an easy brief and if I go to a full service salon, it'll be over $200 here in Perth. So, if I can get it for $60, I'm happy to move around.

    I think I would have lost under $200 in eapired/unused deals in over $20k of spending over the last 4 years. I'm happy to buy/spend more, but the deals are not there and I have been there,done that and just am not interested in the stock standard "pamper" things anymore, reagrdless of price.

    • bin555 on 11/06/2013 - 12:13

      Thats a good insight and your experience is actually consistent with lot of people. I guess in summary, if you have great deals, the obviously they would sell. So, it seems that the group buying sites are struggling to come up with great deals.

  • Freakycat on 20/01/2014 - 10:45

    Bought from a number of sites, bought some scam deals from OurDeal and some small sites. Spreets were good then they stopped spending on marketing and now a referral site. Scoopon and Livingsocial are not bad, but now I tried to avoid spending big in case voucher expired. Since they offer deals that usually on the website for a month, I buy 1-2 vouchers, use/try it first before I buy some more.

    To stay away from scam deals:

    • only buy deals from established restaurant with good urbanspoon ratings/reviews, check for booking restrictions like 'limited seats on Thursday - Sunday'. Limited seat means they have rights not to offer any table to you.

    • do not buy any service deals as you can use serviceSeeking.com.au to get quotes for cheaper rates, eg removal, carpet cleaning and plumbing. I bought a voucher from Ourdeal from Sydney Relocation, ended up arguing with both companies and no work done. I am 10x happier paying a company from service seeking.

    • do not buy any travel deals as they have restrictions on bookings(esp. hotel bookings, they are usually non-refundable on cancellation, hence the price). Use entertainment book and travelzoo instead. Also use trip advisor for hotel review, 'cos some accommodation is so bad you never want to waste your money on it.

    • The best deals from group buy sites including easter show tickets(real savings), frozen yogurt and bubble tea, education software and fun activities for kids and cheap movie tickets. There are many cheap eat places in the city so you may not need to buy vouchers for food unless you really need to go to that restaurant.

  • sm007h on 21/01/2014 - 22:52

    Hopefully, a consolidation of deals sites will raise the reputation of the industry.

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