Cupon Wars
up
Economic & Administrative Sciences School
Company Case
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Groupon vs LivingSocial
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Present by: Alejandra Bernal, Vanessa Carreño, Víctor Baquero, Juan Manuel Erazo, Juan Andrés Rodriguez
Background
This case is about Groupon and LivingSocial, two organizations involved into the sell coupons business. Groupon is the largest and leader in the market; Living social is trying to catch up customers from Groupon. Groupon has more the 50 million subscribers and valuable in more than 6 billion dollars (turned down this offer from Google) instead Living social has 17 million members and the business is valuated in 1 billion dollars. One cause of this advantage is the success that Groupon had in 2010, when obtained a significant growth, in fact Groupon was in Q4 in 2009 and in Q1 in 2010.The rise was reflected in nearly all major sales per metric, from average buyers per deal (111%), average deal price (from 27,2 dollars to 38,36 dollars), average gross per sale (102 percent) and unique visitors (from 900 000 in September of 2009 to 3 000 000 in march 2010). In 2010 LivingSocial was the second group coupon site visited with a percent of 0,033 to 0,036 respects the first.
The case talks about some issues and business moves but particularly about one between LivingSocial and amazon in which it gives 20 dollars gifts cards just by 10 dollars; this was shocking because Amazon is a big organization and not a small local business. Nevertheless they had an added twist and LivingSocial purchased the gift cards and sell them directly and living social purchase the gift cards at face value and absorbed the losses. The reliability of this business consist in the 1,3 million coupons LivingSocial managed to sell because it generates 11 million in sales (Beating Groupon in a similar deal with Gap); Later Amazon invested 175 million dollars in LivingSocial (in December
Economic & Administrative Sciences School
Company Case
-------------------------------------------------
Groupon vs LivingSocial
-------------------------------------------------
Present by: Alejandra Bernal, Vanessa Carreño, Víctor Baquero, Juan Manuel Erazo, Juan Andrés Rodriguez
Background
This case is about Groupon and LivingSocial, two organizations involved into the sell coupons business. Groupon is the largest and leader in the market; Living social is trying to catch up customers from Groupon. Groupon has more the 50 million subscribers and valuable in more than 6 billion dollars (turned down this offer from Google) instead Living social has 17 million members and the business is valuated in 1 billion dollars. One cause of this advantage is the success that Groupon had in 2010, when obtained a significant growth, in fact Groupon was in Q4 in 2009 and in Q1 in 2010.The rise was reflected in nearly all major sales per metric, from average buyers per deal (111%), average deal price (from 27,2 dollars to 38,36 dollars), average gross per sale (102 percent) and unique visitors (from 900 000 in September of 2009 to 3 000 000 in march 2010). In 2010 LivingSocial was the second group coupon site visited with a percent of 0,033 to 0,036 respects the first.
The case talks about some issues and business moves but particularly about one between LivingSocial and amazon in which it gives 20 dollars gifts cards just by 10 dollars; this was shocking because Amazon is a big organization and not a small local business. Nevertheless they had an added twist and LivingSocial purchased the gift cards and sell them directly and living social purchase the gift cards at face value and absorbed the losses. The reliability of this business consist in the 1,3 million coupons LivingSocial managed to sell because it generates 11 million in sales (Beating Groupon in a similar deal with Gap); Later Amazon invested 175 million dollars in LivingSocial (in December