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PayPal to move into daily deals, threat to Groupon

The daily deals market may well be overcrowded, but that’s not stopping online payment giant PayPal from announcing its intention to get involved.

The eBay-owned company plans to use information from its 103 million members to offer deals tailored to their buying habits straight to their mobile phone when, for example, they’re passing a particular store. It believes that offering a location-based service like this will give it an advantage over other daily deals companies.

Bloomberg reported PayPal president Scott Thompson as saying the company hopes to begin offering mobile deals in the first few months of 2012. Market leaders Groupon and Amazon-backed LivingSocial, which combined had an estimated 73 percent share of the daily deals market in October, will no doubt be watching with great interest.

While a slew of companies have come and gone in the daily deals market, PayPal will be entering with more than 100 million people already on its books, with buying habits that can be analysed, giving it a big advantage over those that have tried and failed before.

In a recent interview with Bloomberg at PayPal’s San Jose HQ, Thompson promised an experience “completely different than anyone else’s through and through.”

He added: “We’ll only give you something that we think fits the category of unique and relevant. Everyone else is going to bombard you.”

Fear of competition in the daily deals market was said to be one of the reasons Groupon’s share value dived after the Chicago-based company went public at the beginning of last month. Launching at $20 a share, their value initially jumped by some 50 percent before settling at around the $26 mark. Toward the end of last month, however, they fell below the launch price to just under $17. Since then they’ve clawed their way back to around the $22 mark, though it’ll be interesting to see what impact the announcement by PayPal has on their value.

With research firm BIA/Kelsey estimating that the daily deals market could double in value by 2015 to $4.17 billion, it’s little wonder PayPal has decided to get involved.

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Trevor Mogg
Contributing Editor
Not so many moons ago, Trevor moved from one tea-loving island nation that drives on the left (Britain) to another (Japan)…
Groupon CEO calls IPO ‘a wild ride’ as share value rises

Groupon shares received a much-needed boost on Wednesday after its CEO, Andrew Mason, commented publicly for the first time since the company began trading on the stock exchange on November 4.
In a post on the daily deals site’s official blog, Mason announced that between Black Friday and Cyber Monday the Chicago-based company sold more than 650,000 special holiday deals, marking a 500 percent increase on last year’s figure.
Off the back of the news, shares in Groupon rose 9.3 percent, closing at $17.50, though this is still below the launch value of $20.
In the blog post, Mason also commented on the events of the last month. “Our IPO process was a wild ride, but we’re excited to get back to business and are focused squarely on the future,” he wrote.
Investors will be relieved to see the share value making an about turn - on the first day of trading, they shot up to just above $31 but then slumped to around $15 earlier this week.
Fear of tough competition from rivals such as LivingSocial and Google Offers appears to be one of the factors that drove the share price down.
Groupon, which launched only three years ago, raised $700 million in its IPO at the start of November, making it the largest IPO by an American Internet company since Google raised $1.7 billion in 2004.
Mason ended his post by promising that there’s more new stuff on the way for Groupon customers, writing in the post: “We’ve got even more lined up for the next six months than we did in the last six months, so stay tuned!”
[Source: Reuters]

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Anti-trust watchdog fines Groupon Korea for posting fake reviews
Groupon Logo (Dec 2010)

Groupon’s South Korean operation has encountered a bit of bother after it was fined by the country’s anti-trust watchdog for putting up fake reviews on its website and exaggerating the number of products bought by consumers.
The incident highlights just how competitive the daily deals industry has become as local rivals in the Asian country, such as Coupang and Ticket Monster, fight Groupon for a share of the market.
The Korea Herald reported on Monday that the country’s Fair Trade Commission (FTC) had fined Groupon’s Korean arm 17 million won ($14,773) for its wrongdoing. It has also ordered the company to put up a notice on its website detailing the penalty for a period of four days.
In a statement relating to the company’s misdemeanor, Groupon Korea said that the disingenuous reviews were put up before August and that it had since taken “corrective measures.”
Three other daily deals websites based in the country have also been fined for claiming to have sold more products than they really had, the FTC said.
Groupon pioneered the daily deals business with its launch in 2008. The Chicago-based company currently operates in 45 countries and employs around 10,000 people.
Earlier this month Groupon went public, raising $700 million in its IPO. However, since then some investors appear to have got cold feet, with its share value last week dropping below its launch price of $20. At the time of writing it stands at $15.24.
The drop has been attributed to a number of factors, including fears of increased competition from rivals such as Amazon-backed LivingSocial and Google Offers.

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How to use social media and save on Small Business Saturday
small business saturday

Between Black Friday, Cyber Monday, and the unending onslaught of online deals, there is another holiday shopping day that might get lost in the shuffle: Small Business Saturday. This year marks the second annual such event, a new tradition that tries to steal some addition from chain retailers and big e-commerce sites and give it to local vendors.
And this year, the fledging ritual is getting some serious attention from social media sites. Facebook, Twitter, and Google have all pledge their efforts in support, offering and encouraging small business owners to use their sites’ tools to promote shopping this weekend.
Local retailers aren’t the only ones who stand to benefit this weekend. What happens to consumers who want the discounts but sans the chain names (that are sometimes attached to controversy) they go hand in hand with? Small business Saturday can fill that void along with the help of some geo-social applications.
Foursquare
Foursquare has been at the top of the social-meets-location game since it began, and Small Business Saturday will be no exception. If you have an American Express card, sync it to your Foursquare account following these directions. Then when you check-in to shops who have partnered with the service via Foursquare on Saturday, you will see a button that says “load to card.” Then when you spend at least $25 or more at the participating store, you’ll get a notification saying $25 was credited to your Amex account. American Express is a sponsor of Small Business Saturday, so ratcheting up sales is in its best interest, but turns out they’re willing to compensate you for helping make the event a success.
Etsy
The purveyor of all things handcrafted is a natural fit for small business Saturday—and will appeal to those who want to buy “local” without leaving their living rooms. Just searching “Small Business Saturday” on the site brought up a slew of items that will be on sale this weekend, and this blog catalogued some of the best e-shops on the site that offered discounts last year.
Daily deal sites
While the likes of LivingSocial and Groupon tend to offer food and spa deals, the occasional local retailer pops up. Between now and Small Business Saturday, a minimal amount of homework and creating an account with one (or all) of these sites could save you some Monday. We'd advise getting with something like The Dealmix, which collects a large variety of all these local deals. Keep an eye out on any of these applications for vendor or shop deals in your area. Then make a call or check Facebook to see if they are participating in Small Business Saturday. Then add those savings to whatever discount the daily deal site was offering. Of course, you should check that you can use coupons during the Saturday sale.
Facebook
Facebook is offering a slew of tools for small businesses to take advantage of, but the site is also catering to consumers. Check out the Small Business Saturday Facebook page and you’ll have access to a variety of information, including city guides for optimizing your local shopping in New York, Chicago, and San Francisco, as well as organized events in cities nationwide. Some of them include raffles, free gift wrapping, Santa visits for the kids, and community breakfasts.
Twitter
Be sure to follow your favorite local business on Twitter, if you haven’t already. We’re sure a great many of these sites will have implemented a Follow button (one of the tools in the Small Business Saturday kid), and will be using the hashtags #ShopSmall, #ShopSmallNov26, #SmallBizSaturday and #SmallBusinessSaturday to spread word of their discounts this weekend. 

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