Consumers in Singapore see value in making bulk purchases, and because of that, it is of no surprise that Singapore has caught onto social buying. Chicago-based Groupon is by far the most successful business with this model, with a valuation of over $1 billion, having started only 2 years ago. Since the success of Groupon, many clones have mushroomed world over, with China alone reported to have over 100 clones in the market, as observed by fellow blogger, Gang Lu. These companies offer a deal for a specific time frame ranging from 24 to 72 hours, in specific cities, and only if there is a minimum demand for the deal.
Singapore has always positioned itself as a testbed for startups looking into expanding in South East Asian region. We caught up with one such business, VoucherWOW. VoucherWOW is founded and headed by Alice Wong. Alice had a start in the finance industry, with UBS and Merrill Lynch and then served as COO of an online tailor in the UK before coming up with VoucherWOW.
VoucherWOW’s first deal was released on 10 May 2010 with Sogurt, a self serve frozen yogurt shop, which used VoucherWOW to promote a yogurt, cake, and drink set worth $12 for only $5, saving $7 for a total of 67 customers. Some of the other interesting deals they have put forth include: Bella Luna, a locally owned spa, which offered a $300 45-minute body massage and 60-minute face therapy session for only $20 through VoucherWOW. This offer had an overwhelming response, bringing in a total of 127 new customers in only 72 hours!
All deals on VoucherWOW are up for grabs, 72 hours from the time they are posted on the website. According to Alice, VoucherWOW has saved Singapore consumers $60,000 since its launch in May 2010. Discounts are normally 50% or more on each deal.
However, not all deals are activated because the tipping point isn’t reached. “We have about 5000 customers and we’ve realised that F&B and spa deals are the most popular and also yield the largest margins. Retail stores in comparison yield smaller margins, ” said Alice.
With regard to competition, here are some of the Groupon-type portals operating in Singapore.
First deal started on: 2 May 2010
Total Number of Deals: 13
Total Number of Deals Bought: 1,410
Most Popular Deals: Manicure and Drink at Polished Divas (300 buys), 8-week Belly Dancing Course at Jitterbugs Swingapore (145 buys), 1 hour massage at Spa Boutique (125 buys)
Number of Facebook Fans: 2, 234
Clone Verdict: What’s different about them and all the other Groupon clones is that you get your own personalised referral link when you sign up with Beeconomic, after which each friend you refer who buys a deal on Beeconomic, earns you $5 for your next Beeconomic deal purchase. Their deals are unusual and not something most of us would think of considering doing on our own if not for the slash in price (pole dancing or belly dancing anyone?). Now that’s a deal.
First deal started on: 22nd May 2010
Total Number of Deals: 16
Total Number of Deals Bought: 935
Most Popular Deals: Donut Factory Cash Voucher (205 buys), Any Movie @ $4 in Singapore (298 buys)
Number of Facebook fans: 1,821
Clone Verdict: Their deals have to do with everyday stuff – food, shopping vouchers, beauty treatments – things all of us will need and definitely find use for. They come at nominal rates – usually below $50.
First deal started on: 3rd May 2010
Total Number of Deals: 10
Total Number of Deals Bought: 867
Most Popular Deals: Segway ride at Sentosa (257 buys), Gelato Ice-cream (121 buys)
Number of Facebook fans: 3,747 fans
Clone Verdict: Most of their deals surround fine dining and joyrides on sunny Singapore, but at the nominal price of below $40. There are also talks of them receiving another round of investment from private investors.
First Deal started on: 10th May 2010
Total Number of Deals: 8 (for the month of June only)
Total number of Deals Bought: 206 (for the month of June only)
Most popular deals: Bespoke Shirt at Kevin Seah (66 buys), 45-Mins Foot Reflexology at Feet Press (71 buys)
Number of facebook fans: 1,474
Clone Verdict: They have pretty affordable deals that are well below $60. They plan to expand to 14 more cities apart from Singapore.
Its a pretty neat idea if you look at it: these websites leverage on the power of group buying to provide a win-win for consumers and businesses. Consumers get huge discounts on the best things to do in Singapore, and businesses receive great advertising and a flood of new customers. And besides, with so many clones around, it does seem that social buying sites aren’t very difficult to start – you definitely need an aggressive and savvy group of salespeople to hit the streets and round up unique deals in town. The technical side of the service isn’t exceptionally hard to build judging from Groupon.cn (thats right! They’ve copied everything about Groupon, right down to the design AND the name). Low barriers to entry like these make a business like this hard to differentiate from the rest of the crowd.
If you’re planning on developing your own Groupon clone in Singapore, what should you sell? It does seem like spas and beauty treatment deals sell well. So do vouchers for fine dining restaurants and snacks. Start a facebook group and twitter account while you’re at it, to spread the word about your deals so more people buy in on it. If you’re looking for applications sold this way, you would be interested in AppSumo, by one of our speakers at echelon 2010, Noah Kagan. Some other local variants include Lobang Club.com and Vouchies.
Interestingly, most of these social buying sites launched their first deals at around the same time. So, we did some basic analytics and found that Beeconomic and Deal.com.sg have had the most reach and number of pageviews since they started. But certainly, this is no validation of their success. “Singapore’s market can take 2, maybe 3 major players, not any more, ” observes Alice. Looks like the space is heating up with more social buying sites in the market. It will definitely take at least another year before we can ascertain which of these is the most successful in Singapore. If you know of any other Groupon sites in Singapore, let us know in the comments section.