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News  22, Dec 2010

Only three can survive Groupon-clone wars, say GroupsMore founder

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Joel Neoh, founder of GroupsMore. Photo taken from YouthAsia

Group-buying deal sites are all the rage these days, more so after the recent Asian acquisition spree by Groupon that saw Beeconomic, uBuyiBuy, and Atlaspost being snapped up. Malaysia is no exception to the group-buying trend, with sites like Everyday.com.my, MyDeal.com.my, and GroupsMore.com among the more prominent sites.

However, with such heavy competition between a dozen or so similar sites in Malaysia, what makes one Groupon clone stand out from the rest? What makes or breaks a group-buying business model? We spoke to GroupsMore founder Joel Neoh from YouthAsia to tell us more about what the group-buying deal trend is like in Malaysia, and why GroupsMore isn’t just another Groupon clone.

How did GroupsMore come about?

The site launched on September 1, 2010 and it came about after me and (Youth Asia co-founder) Khai Lee first picked up on the Groupon business model in July last year. It was something along the lines of what YouthAsia is about – getting young people to do something – but we didn’t know how quickly it was going to pick up.

It was only in March/April that we thought about it more, especially after Groupon was featured on CNN as one of the fastest growing web companies with a valuation of $1.2 billion. In fact, we didn’t realise the number of Groupon clones in Malaysia until we were one-and-a-half months in development – so we just launched it by September after two months of working on the platform.

What’s the extent of Groupon clones in Malaysia?

There are about 10 to 20 clones here – it’s hard to keep track of the numbers because many of them have come and gone, even before GroupsMore was launched. That’s the tricky part of this business – if you don’t get hundreds buying from the start, it’s not a profitable business. To be successful, you’ll need to crack the four-figure number of buyers – getting 100 to 200 buyers would only get you to the break-even level.

We have over 40,000 subscribers in our deal alerts e-mail list sent out once every two days. About 70% of those are under 25 years old, and 30% over 25 years old. The biggest deal saw about 1,700 buyers signing up, but that’s more of an exception because it’s a cheap RM2 deal. For the more popular deals, we would see an average of 300 to 400 people signing up. Our deal tipping point ranges from 30 to 50 people, and 90% of the deals hit that point.

Which are the more popular types of deals in Malaysia?

It’s something that we’re still figuring out; some of our competitors are skewed towards more beauty-oriented deals, but I would say we do well in deals involving activities like paintballing and wakeboarding compared with other sites. Currently, we’ve got three broad categories of deals – activities, food, and beauty – but in the months ahead we’re looking at making our deals more appealing to those 25 and above.

What’s the toughest part of making a group-buying deal site successful?

It’s getting the critical mass – I would say a base of five to 10 times more of what we have now is the number we have to aim for. Also, the online payment structure here isn’t the best – some payment channels don’t accept debit cards, for instance – and hopefully with PayPal coming in that would help smooth things out.

As far as getting deals are concerned, it’s easier now thanks to other group-buying sites talking to retailers – about a third of featured deals come through retailers approaching us. This kind of exposure is why I don’t see other sites as being competitors yet – when we’re talking in the millions of subscribers on the Groupon and Living Social level, then yes, but not at this 40,000 level that the Malaysian market is at.

Right now, we’re breaking even after three months since launching. We haven’t received any backing or funding, and we’ve got a lean team of six, with two in sales, two in product development, one community manager and then there’s me.

With the large number of competitors, what makes or breaks a group-buying deal site?

It’s understanding what the buyers want to experience. It’s easy to form a Groupon site – you just buy the script and that’s it. But after that, you’ll have to go through the same three challenges we did before becoming successful: getting the subscribers, converting them into buyers and then understanding the buyer profile.

Also, it’s not easy to grow above 50,000 subscribers in Malaysia – no one’s had that level of subscriber base here. I predict in the next 6 to 12 months there’s going to be a convergence of all these clones. Most of them would die off, some would be bought up, leaving us with at most two to three sites – that’s the most each country can have. The market leader would have 60%-70% of the share, the second an okay 20% and the third a small, break-even point of 5%-10%

So what makes GroupsMore different that other Groupon clones?

Most of the Groupon clones started by just buying and restyling the script – but the problem is that you can’t innovate on it. So we built our script from scratch, allowing us to make a better product based on customer feedback, and add on new features like our token system – a unifying reward system where we’d give out RM2 tokens when users join in through a recommendation, or from a microsite, for example.

We also pick and choose the kind of deals we feature – it’s got to be something that we’d want for ourselves. I remember when we first built GroupsMore, it looked very much like Groupon; after two weeks, I asked Khai Lee, “Is this it? Is this what we intended it to be?”

We need to find a purpose to existing. We can’t exist just to give people discounts; that’s not inspiring enough. So while group buying is the underlying mechanics of GroupsMore, we believe that we’re here to make life more exciting, encouraging people to try new things, and meeting new people. That’s already happening to our office – using GroupsMore, we’re already doing things we wouldn’t have done before – so that’s a good sign.

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  • C Biz55

    when one thing started successfully, all people follow the path way…then the blue ocean product/service become a red ocean market…guys it’s time think of our own creative ideas rather than become copycat and that’s why the survivor rate in red ocean market is very very low….

  • http://blog.aizuddinmanap.com Aizuddinmanap

    now they acquired by groupon

  • Pingback: Groupon acquires Malaysian deals site GroupsMore | e27

  • Giannis Pinak

    Look, with groupon clone ready scripts such as Couponic it is extremely easy to build a groupon clone site. Full access to source and a handful of modules, the deals site market is expected to rise not only in Malaysia but also Europe, US and small countries like Greece. Multilingual option is available too for free ;) Check here http://uniprogy.com you might want to create one for yourself too :p

  • http://www.skinpon.com/ thiru

    cool sites. competition is great for both business and customers i guess.

    feel free to checkout the following site which serves the niche for mobile phone skins such as iPhone skins, Blackberry skins, and more to come

    URL : http://www.skinpon.com/

    Cheers

  • http://joomabc.com/ azure0434

    Groupon Clone is definitely so popular these days. A large number of people want to set up their Groupon clone websites but do not know how to choose a good groupon clone script. Here I recommend a Joomla!-Powered Groupon Clone Script which has full functions and two styles-Groupon and LivingSocial Style. You can refer to joomabc.com for more details. http://joomabc.com/groupon-clone-faq

  • Pingback: Ticket Monster snaps up Malaysian group-buying site | e27

  • http://www.MyKouponz.com MyKouponz

    Hi,
    Most of the Groupon Clone sites in Malaysia are featured on a iPhone / Android M-Commerce App, which allows malaysians to view, share, Buy and redeem their coupons from their smartphones. Plz visit http://www.MyKouponz.com for more info.

  • jenni

    Why you people are following the same way!!! we can find out a little space between product/service become a red ocean market…   Groupon Script

  • http://grouponclone.contussupport.com/ Groupon Clone

    Group buying site.. a successful new ecommerce trend, the best way to experience your city without paying full price.

  • http://grouponclone.contussupport.com/ Groupon Clone

    Group buying site.. a successful new ecommerce trend, the best way to experience your city without paying full price.

  • John

    Check out http://www.monkeywee.com
    It gets all deals and share them  in one place.

  • Anonymous

    WHY NOT USE DEAL AGGREGATOR FOR DEAL BROWSING? in Malaysia, I found ilovedeals.my is quite good.

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