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Local deals site DailyDo runs 5 deals sites

Back when group buying sites were popping up every month, we knew there would be some consolidation in the market. We even published an article in April 2011 titled Too many Group Buying Sites?

Whenever there is fast growth in an industry, there is always the question of how much growth can't actually be supported by consumers. When things start to slow down, many sites who are used to fast growing sales either can't make the numbers work any more, or just give up due to lower returns.

It has been no different for the fast growing daily deals market. Group buying sites were easy to set up, but hard to run. It requires lots of staff, you can't just order some product and start selling like deal sites selling physical products can.

Group Buying (voucher) sites need a fine balance of businesses willing to run deals, and customers willing to buy them. Get the balance wrong and you either have customers wanting better deals that you can offer, or not enough customers to make the deal a success.

To run a group buying site you need a call centre of people that are calling businesses all day. You can't just do it as a part time thing like dozens of new businesses tried to do. While you could potentially start a physical product daily deal site part time, you can't run a group buying site part time.

As well as calling out all day to strike up deals with businesses, you also need to get customers on your database. And you can't have one without the other. Have low quality deals, and you'll have no customers. And have no customers, and you won't sell any deals, making it harder to convince other businesses to run deals. Its a chicken and egg situation.

Running a group buying sites you are either full on, or you are not in business. This is evidenced by the fact that there are no small group buying sites. None. The few that remain all have more than 10 staff.

There are essentially just 4 players in the Group Buying (vouchers) space. You have GrabOne the market leader. TreatMe which was started by TradeMe. GrouponNZ which took a long time to launch, but eventually got a foothold here. And finally you have the mega Daily Do consolidation of 4 sites!

Daily Do has bought up several other sites including Yazoom, Groupy, Spreets and Cudo (of which Cudo is not an operating site, just a placeholder these days.)

Interestingly, they still run each site on it's own domain name. Daily Do haven't created one mega brand. The jury is out on whether they should have folded all sites into the DailyDo.co.nz brand.

But for them it's good having multiple sites because they can tell merchants that their deal will run on up to 4 deal sites, not just one. It's a selling point that sets them apart from say, just running a deal on GrabOne.

With 4 sites, the same deal could potentially be rotated on each site over a 2 week period meaning more sales. Whereas on GrabOne they usually wouldn't show a deal for that long due to visitors getting bored of the same deals each day.

But for Daily Do it does mean running different databases, customer lists and marketing. Still, by having 4 sites, you can access 4 different demographics for your deal.

Daily Do runs the following deals sites:

Cudo.co.nz (Placeholder site)

Posted: Tue 20 May 2014


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