The success of daily deals site Groupon (NASDAQ: GRPN) has spawned hundreds of imitators with LivingSocial and of course Amazon (NASDAQ: AMZN) probably being its nearest rivals but little known iTrackr Systems (OTC: IRYS) has a Groupon-like site in the social commerce space that could give both a run for their money while delivering profits to investors - if it can grab enough market share. Of course and as a pioneering local e-commerce marketplace connecting merchants to consumers by offering goods and services at a discount, Groupon (GRPN) clearly has a big first mover advantage on the competition. After all, Groupon (GRPN) already has a critical mass of merchants � meaning it can offer the most and the highest quality deals that will generate the greatest amount of Internet traffic for merchants. On the other hand and as with many other Internet business models, there are low barriers to entry and the cost of switching to a new Groupon clone like LivingSocial is minimal and other established sites like Amazon (AMZN) want in on the discount action. So what do the Groupon clones like LivingSocial and iTrackr Systems (IRYS) in particular have that could beat Groupon (GRPN) at its own game?
LivingSocial and the Other Groupon (GRPN) Clones
To start with, many of the Groupon clones are actually niche sites targeted at certain audiences or groups. For example: A New York Times article from early last year mentioned the Daily Pride targeted to gay audiences, Black Biz Hookup targeted to African-American audiences, Jdeal targeted to Jewish audiences, Gluten-Free Deals for the gluten intolerant, GroupPrice for small businesses and Conejo Deals for the residents of California�s Conejo Valley. It was even noted that a Web developer in Chennai (India) called Agriya now specializes in building and selling Groupon clone sites plus a number of daily deal aggregator sites have sprung up to cash in on online deals.
However, LivingSocial is considered to be Groupon�s primary rival and a consolidator of the group-buying sector. Although still primarily North American focus, LivingSocial now operates in 25 countries and boasts 40 million subscribers and it has a $175 million investment deal with Amazon � which has a 31% stake in the company.
In order to grab market share from Groupon, LivingSocial has been offering better terms to its merchant partners. Specifically, the Wall Street Journal reported in early February that LivingSocial had gross billings of $750 million for 2011 and it kept about 33% of these billings while sharing 67% with merchant partners. On the other hand and through September of last year, Groupon kept 41% of its gross billings but its obviously under pressure from LivingSocial and other websites.
Moreover, Investor�s Business Daily has quoted one Groupon analysts as saying that Groupon lacks the strong network effects that lock consumers into using the site while merchants tend to use every site out there to market the same deals. Otherwise, the daily deal type space is seen as growing and worth about $3 billion a year in the US with the pace of growth slowing down as the industry begins to mature.
Hence, LivingSocial has been pursuing acquisitions outside the US for growth. Last Thursday, it was announced that LivingSocial had purchased Jump On It, a two-year-old Australian site which it had bought a 31% stake in for $5 million back in November 2010 as a placeholder for a complete acquisition. And while neither LivingSocial nor Jump On It would confirm what the final sale price was, it has been said that the deal was in excess of the Yahoo!7's acquisition of group-buying site Spreets for an estimated $30 to $40 million
Finally, it should be noted that all of the other Internet heavyweights such as Facebook, Google (NASDAQ: GOOG), OpenTable, Travelzoo and newly public Yelp (NYSE: YELP) have been adopting Groupon like features to cash in on the discount deal craze.
What Does iTrackr Systems (IRYS) Offer That The Other Clones Don�t Offer?
iTrackr Systems is a software company offering Internet and mobile social merchandizing technology platforms to retailers and consumers. iTrackr Systems also owns and maintains several of the largest consumer and business data files ever created that contains data about over 207 million American consumers, 87 million foreign consumers and 16 million US based businesses plus it has developed RespondQ, a software that will proactively approach visitors to a website in order to assist them with a product search and a purchase right at the right time.
However, iTrackr Systems� iTrackr.com platform has the potential to take on both Groupon and LivingSocial because it allows both local business owners and consumers alike to create and request personalized discounts on the fly. Specifically, iTrackr.com allows business owners to deploy deals to all consumer profiles based on an identified interest within a 25 mile radius of where they operate while a consumer can request a specific and personalized deal directly from any business with an iTrackr.com profile that is based on their actual in-stock inventory and within the same radius of their home address.
This means that consumers who want to save money with daily deal sites no longer need to join daily deal email lists that list deals for products or services they do not want or are from businesses that are too far away for them to take advantage of. Likewise, local neighborhood businesses that join iTrackr.com don�t need to rely on consumers making impulse purchases based on a email deal as they can now cater to what their local consumers actually want.
In other words, iTrackr.com is better positioned to allow local businesses and local consumers forge long lasting relationships � both with each other and with the iTrackr.com platform.
The Bottom Line.
It should be noted that iTrackr Systems (IRYS) is not just another Groupon (GRPN) or LivingSocial clone as its been around since 2006 developing Internet and mobile social merchandizing technology platforms. Hence, iTrackr.com has a much better chance than to beat both Groupon (GRPN) or LivingSocial and actually succeed in the increasingly crowded daily deal space.
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