Groupon South Africa, one year later – Wouter Nel

Groupon is a pioneer of the daily deals concept globally, despite their established success however, it’s only last year that they entered the South African market. Their late entry into the country enabled many local startups to launch daily deals portals to claim a slice of the bargain hunters market.

When I searched for ‘daily deals’ on Google…names such as CitySlicker, DealZone, DailyDeals, Catchoftheday, DealAfrica, GroupBuying, AllDeals, Buxola etc…all appear on the first page of search results.

Today am chatting to Wouter Nel, head of travel at Groupon South Africa about their business…

It’s over a year that Groupon entered the South African market, how has been the journey thus far?

The journey has been an exciting one.

For customers: Groupon resonates with customer because it’s an excellent way to discover or rediscover their new local experiences. The deal is the nudge they need to actually do something instead of just reading about it.

For businesses: Groupon can guarantee a large number of new customers in just a matter of hours. Groupon has created a powerful new marketing vehicle for local merchants. This innovative approach to e-commerce has brought millions in new revenue to local businesses all over the world.

In light of the rapid growth Groupon SA has experienced since its inception a year ago there are a number of inevitable growing pains we have had to face and overcome. Groupon acquired Twangoo in January 2011, and rebranded as Groupon SA.

The Groupon South Africa staff count has now grown by over 95%; globally Groupon has 10,418 employees worldwide. The challenges Groupon faces also include those to do with vendors and circumstances beyond its control such as the local banking system.

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Even before you officially launched, a number of startups locally had already adopted your concept, has your arrival killed them?

In reality, Groupon is a marketing tool and thus we see ourselves functioning within the market of traditional forms of local advertising (newspapers, radio, etc.) as opposed to within the market of other Group buying sites.

We’re fortunate that we continue to sign on and feature new partners who are some of South Africa’s best merchants every single day. Our deals sell well. In the local commerce space, you will not find a site who offers a better merchant experience – our global scale and our expertise ensure that.

The business model on the surface is perceived to be easy on the front end; however there are massive differences in quality of deals and service. We keep our focus on our own brand and on making the customer and vendor experience as seamless as possible. Last year we were voted best Group buying site in the 2011 E-Commerce Awards which seems to be a good sign that we’re on track in the market.

Groupon initially launched using www.mycitydeals.co.za as your homepage, what did you pay for www.groupon.co.za since it wasn’t owned by yourselves?

This unfortunately, is something which Groupon can’t give out.

How come your inventory is predominately travel deals compared to other industries?

Our inventory has various other products under the Groupon umbrella. We feature daily deals on the best stuff to do, eat, see and buy in 47 countries around the world. Groupon uses collective buying power to offer huge discounts and provide a win-win for business and consumers, delivering more than 1,000 daily deals globally.

At a very basic level, Groupon is a city guide that helps people explore their backyard and save money while doing it. We have our National Shopping page for products and we have a Travel page for all travel deals, locally and abroad.

Do you have success stories about local travel companies that have joined your program and transformed their bottom line?

We cannot mention many in Travel just yet but we have pushed huge passenger volumes to both Mango Airlines and MSC Cruises. These deals have been very successful and both businesses have benefited greatly with increased passenger numbers after they were featured on Groupon.

Some travel business owners don’t buy into your concept, how would you educate them in finding value in your services?

Groupon has a large consumer base, over all Groupon Travel Deals inspires all travellers! As mentioned earlier for businesses Groupon can guarantee a large number of new customers in just a matter of hours.

We have created a powerful new marketing vehicle for local merchants, IT is an alternative to traditional advertising, it is easy, fast and risk-free. We guarantee businesses huge exposure and only charge for the customers we acquire for them. This innovative approach to e-commerce has reached millions of customers every day.

Customers are always looking for savings to try something fun and new and businesses are always looking for efficient ways to find new customers. Groupon has taken this word of mouth advertising and enabled it online providing a new medium of advertising one’s product.

Working with Groupon gives each business, as any other advertising platform would, the chance to reach new customers who are paying to try their product. Once in the door, the businesses need to work to retain these customers. Groupon gets customers in the door and the businesses that treat customers well will get repeat customers.

Is Facebook and Google Adwords your core advertising platforms?

We work with thousands of websites locally and internationally through a number of advertising platforms, of which Facebook and Google are just two.

Author: Muzi Mohale

Hi there, am your host and I blog about the tourism industry in South Africa. You're also welcome to contribute your expert content on matters affecting the industry. You can reach me on muzi[at]tourismedition.com

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