Group deal websites predicted to see second wind

Group deal websites predicted to see second wind
SHARE
THIS



There are predictions in the market that online group deals are set to see a second wind.

Group deals website Cudo was bought from mi9 for an undisclosed amount this week by ecommerce company AussieCommerce, owner of DEALS.com.au, TheHome, Ouffer.com and Pop.com.au.

Aussie Commerce’s managing director Adam Schwab, told B&T the acquisition would make the group more competitive against other group deal websites.

“Sites such as Oz Sales have had four of five years head start on us with a $250m plus turnover. The acquisition of Cudo will take Aussie Commerce from middle to top tier competitor.”

Schwab says Aussie Commerce’s turnover is currently around $100m plus.

The online group deals industry was valued by analyst firm Telsyte at more than $500m last year.

The combined revenues of the top five sites, Groupon, Scoopon, LivingSocial, Cudo, and OurDeal, showed greater than 9% year-on-year growth in 2012, with Groupon and Scoopon, accounting for 40% of that growth combined.

However, aggressive consolidation had seen only a modest increase of 1.4% for 2012 compared to the previous year. Cudo’s former CEO Billy Tucker, now founder of online consulting service 57 Signal, told B&T the industry is set to regain traction.

“There’s natural space for $1b of revenue in the market,” said Tucker.  

“It’s a good thing seeing fewer big players on the market because there will be a better share of profits.”

Back in 2011, during a boom in the industry, mi9 put a price tag of $60 million on Cudo. When asked by B&T about the price tag, Aussie Commerce managing director Schwab said that while he wouldn’t disclose the figure, the company had just had its most profitable year ever. A major attraction to the purchase was the ongoing marketing partnership with mi9 including integrated advertising.

Schwab says that while most facets of the online group deals market have a lifespan of around six to 12 months, travel deals have a lucrative future the company is preparing for.

 “We’re focusing on luxury escapes using Australian and international travel agents and a separate vertical,” Aussie Commerce will launch LuxuryEscapes.com.au in three weeks, complemented by a travel magazine.

Cudo’s former CEO Billy Tucker predicts the further consolidation of the industry would see the market reshape.

“Group buying started as entertainment. It used to be about the experience of getting the numbers up to win the deals, but now it is more about the discount and utility. It’s now less of the novelty and more of the discovery.”

Like, Schwab, Tucker also predicts travel as the next big market for group deal ecommerce, with Aussie Commere set to capture a good section of the audience.

“Cudo has been performing well. The consolidation was inevitable,” said Tucker.

“Australia’s market can only host around two or three big winners. We’ll see those emerge in the next six months.”

Please login with linkedin to comment

Latest News

Optus Offers Victorians Free Access To Optus Sport
  • Media

Optus Offers Victorians Free Access To Optus Sport

Locked down Victorians who don’t currently have an Optus Sport subscription will have complimentary access to Optus Sport from this weekend to enjoy the UEFA Champions League tournament plus access to premium health and fitness content through the Optus Sport app. UEFA Champions League – the world’s premier continental football tournament – kicks off at […]

Torrens University Australia Launches ‘Career Crush’ Via VCCP Sydney & Lash
  • Campaigns

Torrens University Australia Launches ‘Career Crush’ Via VCCP Sydney & Lash

Torrens University Australia has launched ‘Career Crush’ via VCCP Sydney and Lash, to help match students with a career they’ll love. Career Crush is an online quiz that determines prospective students’ personal strengths, passions and aspirations to match them with the careers and courses they’re most compatible with. One of the toughest decisions young people […]

Pedestrian Partners With With NZ’s Mi9 To Expand Commercial Offering
  • Media

Pedestrian Partners With With NZ’s Mi9 To Expand Commercial Offering

Pedestrian Group has partnered with Nine subsidiary Mi9 New Zealand to offer NZ brands the opportunity to partner with the likes of Business Insider Australia, Pedestrian.tv and Gizmodo Australia. Next month, Mi9 New Zealand will be representing Pedestrian Group in the NZ market, offering clients the opportunity to work with leading youth publications including Lifehacker […]

VCNI To Launch SVOD Service Featuring ViacomCBS Content, Replaces 10 All Access
  • Media

VCNI To Launch SVOD Service Featuring ViacomCBS Content, Replaces 10 All Access

ViacomCBS Networks International (VCNI), a division of ViacomCBS, is launching a premium streaming service internationally, appealing to audiences of all ages. The new SVOD service will start its international roll-out early in 2021, offering exclusive premieres of all new SHOWTIME series, including Halo and American Rust. CBS All Access originals will also premiere exclusively on the new service, such […]

Optus ‘Yes’ Brand Mark Taken Into New Territory By FutureDeluxe
  • Media

Optus ‘Yes’ Brand Mark Taken Into New Territory By FutureDeluxe

As part of a larger project to refine their brand with partner branding agency Re, Optus have engaged experimental creative studio FutureDeluxe to explore how the iconic ‘Yes’ brand mark behaves in a sophisticated 3D environment. FutureDeluxe have produced a series of 8x idents and a number of static key visuals which will be used […]

Emotive Partners With YouTube And The United Nations
  • Media

Emotive Partners With YouTube And The United Nations

Creative agency, Emotive, and Good Oil Films, is partnering with YouTube and the United Nations to raise awareness around the importance of quality education, which forms part of the UN’s Global Goals for sustainable development.