The month of March signaled that daily deals, and in particular “group buying” sites are here to stay. The reason for this conclusion is that as of March, all the major NZ media companies now have a stake in a NZ group buying site.
ACP/MediaWorks – Cudo.co.nz
APN Media/NZ Herald – GrabOne.co.nz
Fairfax Media – TreatMe.co.nz
Yellow Pages – Groupy.co.nz
TreatMe.co.nz – possibly the biggest news of March was the launch of TreatMe by TradeMe. TreatMe has already made an impact with $1 burgers and $1 coffees. Over 20,000 burgers were sold in 8 hours. With the power of the TradeMe audience, TreatMe will be a major player in this crowded market.
But why would media company involvement signal that these sites are here to stay? Media companies have revenues in the millions of dollars. They aren’t going to get into businesses that have small potential. Media companies will only get into something if it looks to be a profitable and long term trend. Media companies also rarely start a new venture from scratch, they normally buy out an existing company.
Its quite hard to make decent revenue from online display advertising. Group buying sites allow Media companies to earn a commission on each deal without having to get into physical products and the traditional hassles of retail. These media companies also have large online audiences which they can quite easily promote their new sites to.
So for all major NZ media companies to have made investments legitimizes this trend. This means they are convinced that “Group buying” is a business model that is here to stay. New Site Cudo advertises each days daily deal 5 times between TV3 and FOUR. There will also be 10 radio stations promoting the Cudo deal throughout the day. This is going to bring the “group buying” to mainstream NZ.