Groupon, was recently under the limelight for rejecting a $6 billion takeover from Google. It has also raised $950 million in fresh funding and it seems to be putting them into good use.
The group buying giant has entered India by acquiring SoSasta.com from Kolkata-based Friday Media Pvt. The acquisition is a continuation of Groupon’s rapid global growth strategy in Asia.
SoSasta loosely translates to ‘So Cheap’ or ‘So Affordable’ in Hindi language. In just three months since launch, SoSasta has grown to 11 cities in India. SoSasta will transit to the Groupon brand name and site design in coming months.
India has seen a spurt in number of Groupon-like sites launched recently. Group buying sites like SnapDeal, Taggle, Grabbon (acquired by SnapDeal), Buzzintown, MyDala, Dealivore, DealsAndYou.com (previously Wanamo), are all trying to cement their footing in the market. The battle includes city-specific sites like koovs (Bangalore) and MobStreet (Mumbai) with highly customized offers.
SnapDeal has an edge over the rest as it has established relationships with retailers from their earlier venture, MoneySaver. It has been a great success in major cities like Delhi, Mumbai, Chennai and Bangalore. Alexa ranked SnapDeal among the 100 most visited websites in India, SoSasta, however, ranked only at 6,445 place. In other words, the group buying battle in India is still far from over. Groupon still has a lot to work on.
A crowded market in India
Building from last year’s success, group buying is tipped as the next big thing in e-commerce. With the numbers of similar sites launched each week, it’s hard for a common user to differentiate and choose a particular site. Perhaps, the low entry cost and easy availability of payments are some reasons for this hype. We can certainly expect more in the near future. Value conscious buyers in India are already exploring these offers and there are also traces of small businesses such as restaurants and spas offering similar group buying deals. Besides facing tough challenges from SnapDeal, Groupon also has to rise above the crowd to win India’s heart.
A case study
Noufal M, partner of Zaitoon, a specialty restaurant serving Middle- Eastern food in Chennai was expecting around 100 orders when he ran a deal for unlimited barbeque for Rs 149 or USD 3 (a steal at 80% discounted rate). He didn’t foresee 400+ customers rushing to his restaurant with Snapdeal discount vouchers within a week.
According to him, he isn’t necessarily making a profit from the deal, but it has helped attract new customers and gave him the chance to sell additional dishes. Fortunately, Zaitoon managed to pull it off when the customers showed up. But not every small business can manage the unpredictability of running such offers.
This is a war-zone now for local Indian players with the big daddy of collective buying, Groupon entering the market. I hope local start-ups will remain competitive in this game by focusing more on the end users rather than sales, at least for now.
Image courtesy of Life
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
