By Kim Yoo-chul
An email a day to keep the expenses at bay…
Offering deals on everything from restaurants to dance lessons, now in Korea, you can also open an email from Groupon Int’l for an amazing deal-of-the-day as it attempts to get a leg up on Ticket Monster in the local nascent but highly-lucrative social commerce market.
With strong after-sales (AS) policies and flexible refund systems, the U.S.-based “granddaddy” of group buying websites, is targeting a monthly 10 billion in “volume” transactions, within the first half of this year, according to a senior company executive at the launch event, Monday.
``Given how competitive the South Korean market is, we are fully committed to grow a great Korean business. Full investment support is ready,’’ said Matt Zafirovski, a vice president of Groupon Int’l., responsible for its businesses outside the U.S.
``It’s guaranteed that consumers who bought tickets in our websites will get 100 percent refund within seven days but according to related South Korean law. Also, a `partner manager system’ could help partners provide qualified services in a consistent way,’’ added the executive.
Korea is the 44th country that Groupon has entered after the latest China and UAE launches.
By allying with local businesses Groupon aims to offer discount deals for a wide range of products and services.
Each deal must meet a minimum quota of sales for the transaction to push through according to the premise.
Unlike competitors Ticket Monster and Coupang, which are active in advertizing via traditional media, Groupon is heavily depending on ``word of mouth’’ using bigger social networks ― Facebook and Twitter and even runs blogs on Naver and Daum ― the nation’s top-tier portals.
``Partnership with leading social sites and local portals is more than crucial to continue the craze in the local market. But Groupon doesn’t have any imminent plans to strike acquisition deals for an external growth,’’ said the executive during the launch event in downtown Seoul.
The first commercial item here by Groupon is a 50 percent-discounted coupon for an online shopping mall ― www.wizwid.com. If 1,000 customers register for the 50,000 won-worth coupons, then Groupon will be able to offer it for 25,000 won with 90-day validity.
Initial plans are quite ambitious as Groupon’s ``10 billion won and 20 percent market share within the first half’’ would be the highest in the nation, while Ticket Monster, Coupang and wemakeprice.com are already competing for bigger stakes.
The current sector leader Ticket Monster reached 10 billion transactions in January this year, followed by Coupang with 6 billion won during the same month, according to officials.
Groupon is planning to increase its service regions to 10 from the current six across the country by the end of April in aggressive efforts to infiltrate the local market.
Despite upbeat business plans, the American e-commerce provider seems overly ambitious to yield such high returns as its not ``fully different’’ from existing services already available from rivals.
South Korean are also service-sensitive people and e-commerce remains unfamiliar.
Research firms however predict the local social commerce market will rise to 500 billion won this year from 150 billion won in 2009.
``We had thought about how to differentiate ourselves from others. But Groupon has just decided to go with the basics. We will try to respond to consumer demand much faster,’’ said the executive, without elaborating further.
Since 2008, Groupon has led a worldwide movement in e-commerce, using the principles of collective buying to generate millions of dollars in new revenue for local businesses, while saving subscribers more than $2 billion.
Internet giant Google had proposed to buy Groupon for $6 billion, last year, attracted by the sites’ global networks and a rising demand for socially-interactive businesses.
``Groupon is robust in its Asian presence, currently serving nine countries including Japan, Hong Kong and India and China in the coming months. Let’s see what will happen,’’ said an industry executive.