A Daily Deal Audit In Singapore

I came across this question “What do Small Business Owners think of Groupon” on Quora (the user-generated online question and answer site) recently. The responses offered an interesting perspective. Most of us have views that favour the social shopping sites because we tend to believe that the discount coupons help consumers save money. For the merchants, we think that the coupons ensure some revenue.

The crux of the Quora thread questions the benefits of social shopping for both consumers and merchants. With social shopping sites, consumers are now expecting bargains every day. From an economic perspective, the consumers become extremely price-sensitive, choosing to only purchase at heavily discounted prices.

Consequently, the merchants might lose out. Here’s why. While the “social shopping” model offers a low cost advertising and publicity channel for small-time merchants, there is a lack of brand loyalty among consumers (assuming everything else is constant). Consumers purchase the deal because the price is irresistibly cheap. Over the long run, even if consumers like your product or service, they might not want to pay the full price. Instead, they might demand that you do another run on the social shopping site, or they might purchase a similar deal from another merchant.

Some would then argue that providing discounts is a common business tactic that any retailer or business-owner can offer. But discounts are clearly different. Retailers offer discounts to get rid of existing stock. Think of it as a basic economic principle: you decrease the price of the supply so as to increase demand. However, in social shopping, you create the demand first, without necessarily ensuring that there is enough supply. Retail outlets know their inventory count perfectly well, and can afford to slash prices based on this knowledge.

Singapore, like many other countries, has caught up with the social shopping scene. According to an analysis by AllDealsAsia in October 2010, there are at least 15 “Groupon Clones” in Singapore.

The local media (both Mainstream and Tech Blogs) has positive coverage on “social shopping” in recent times, especially with:

1) Beeconomic’s acquisition by Groupon.
2) Telco Giant SingTel’s launch of a Daily Deals site on its inSing portal.

Doing A Deal Audit

With so many social shopping sites in Singapore, what kind of deals are the sites offering? Who buys them? How much savings do they offer?  

For my mini-analysis, I compiled data based on the “deal of the day” (on 31 Dec 2010) offered by each of the social shopping sites. The sample of social shopping sites is based on SGEntrepeneurs’ article (which in turn, is based on the AllDealsAsia article). Initially, I wanted to analyze the daily deals over a period of one week or one month. However, some of the sites do not have an archive. Hence, I made do with a day’s worth of deals.

Findings

From the sample, 12 out of 17 (70%) sites showed at least one active daily deal. Out of the remaining five, two needed user account log-in (lazy users like me might choose to give it a miss), one did not have any deal of the day, one site only offers deals in Hong Kong and the fifth one is an inactive website.

For the 12 sites, there were a total of 14 active daily deals (note that all the sites offered one active daily coupon on their main page, except for inSing, which offered three).

Overview of deals on 31 Dec 2010: