New York — Groupon Inc. has begun spreading its group deals service by granting discounts of more than 80 percent on products sold over the Web in the U.K., thrusting the Internet-coupon company into closer competition with the likes of Amazon.com Inc. and eBay Inc., reports Bloomberg.
The move puts the Chicago-based budding establishment into closer competition with online retail giant Amazon and online auction service eBay — both of which have communities of online vendors who may now take advantage of Groupon’s services to sell their items.
Groupon, which garners most of its revenue delivering daily deals for local restaurants, hotels and other merchants, may be able to reinforce its growth by adding vouchers for e-commerce sites. With its ability to send discounts to more than 115 million e-mail subscribers, Groupon could attract sellers that normally hawk their wares on Amazon and eBay, said Scot Wingo, chief executive officer of ChannelAdvisor Corp.
“One thing they do have that Amazon and eBay do not have is the authorization to touch over 100 million people daily,” said Wingo, whose Morrisville, North Carolina-based company provides services for online merchants. “There is $500 million to $1 billion in sales they could drive just because of the scale of their subscriber base.”
Groupon’s new service empowers consumers in the UK to purchase product deal codes, which they then enter into an online vendor’s website when making the transaction. It is a pretty perfect way for the emerging enterprise to remain focused on selling deals instead of technology to push those deals–not unlike its core business of selling daily deals from local restaurants, hotels and other local merchants.
Groupon’s National Deals feature has marketed mattresses from UK-Bedding, teeth-whitening kits from Whitening Professionals and tailored photo albums from Albelli. In each case, Groupon has sold more than 10,000 items.
“It seems to be working really well, and I’m guessing once they get it to the point they feel good about it, they can bring it to the U.S.,” Wingo said.
Julie Mossler, a spokeswoman for Groupon, declined to comment on the effort.
So far, the company has been extremely winning in its efforts to sell online product deals. In once instance, Groupon sold $2 million worth of mattresses to UK consumers in a single day, according to a memo from CEO Andrew Mason that was obtained by Bloomberg.
“We sold $2 million worth of mattresses in the U.K. — in one day!” Mason wrote in the memo.
Groupon is constantly spreading its services in other ways. The company has begun selling discounted concert tickets through a partnership with Live Nation Entertainment Inc. and cheap hotel stays through an alliance with Expedia Inc.
However, the company’s major competitor in the U.S. is Washington, D.C.-based LivingSocial, which is promoted by Amazon. LivingSocial is trying out with new kinds of deals as well. The company plans to offer a discount with Whole Foods Market Inc. today that gives users $20 worth of groceries for $10. It is the first nationwide grocery offer by a daily-deal company, said Andrew Weinstein, a spokesman for LivingSocial.
Moreover, Groupon, which filed an initial public offering earlier this year to raise an estimated $750 million, has delayed its IPO plans due to stock market volatility, people familiar with the matter said earlier this month.