If recent market data on the daily deals site were to be analyzed, it would appear that the overall market share of leading deal providers is rather fickle. The market share for these sites is dependent largely on the quality of offers they come up with. According to research firm, Yipit, LivingSocial has been quietly gaining ground over the past few months. In May of this year, LivingSocial saw their market share reach 24% compared with 20% a month ago. During the same period, Groupon’s market share fell from 52% in April to 48% in May. In July, though, the trend reversed: Groupon’s market share expanded to 49% while LivingSocial’s fell to 21%. With players like Facebook and Google entering a market estimated to be worth $2.7 billion this year, competition will be all the more interesting and dynamic. No wonder both Groupon and LivingSocial are in a big rush to get their IPOs through.
LivingSocial is said to have lined up JPMorgan, Bank of America, and Deutsche Bank to manage their IPO, which is expected to be launched later this fall. They plan to raise $1 billion through the IPO at a valuation of $10 billion-$15 billion. Revenue estimates for LivingSocial remained unknown, but market estimates that the company will end the year with revenues of $1 billion and earns revenues of $50 million a month. As of the end of July, LivingSocial claims to have a user base of 32 million across the U.S. and 43 million across the world and operate in 575 daily deals markets worldwide.
LivingSocial’s International Expansion
LivingSocial continued international expansion both organically and inorganically. Earlier this year, they launched their website in the Netherlands. Recently, they acquired the Middle East–based company GoNabit. GoNabit was founded in 2010 and has operations in the UAE, Egypt, Lebanon, Jordan, and Kuwait. It was the first group-buying site in all the markets it operated in with the exception of Egypt, and it was also the first group-buying site with an Arabic-language interface. Apart from standard daily deals, GoNabit also offers family-oriented offers through Dubai Family and travel deals through GoNabit Getaways.
LivingSocial also acquired Ensogo, a daily deals site operating in Thailand and the Philippines, and DealKeren, an Ensogo company based in Indonesia. With more than 800,000 members across Thailand, the Philippines, and Indonesia, Ensogo is known to be the leading site in the region. These were the first acquisitions made by LivingSocial in Asia.
Last month, they acquired South Korean daily deal provider, TicketMonster. TicketMonster is South Korea’s largest daily deals service provider with a market share of 45% and transactions worth $95 million having occurred on its site in the last half of 2010. With their acquisition, LivingSocial now operates in 25 countries across six continents.
I fear that LivingSocial is following Groupon’s path of expanding internationally instead of focusing on their current customer base. Similar to Groupon, their offers also need to be more interesting and more local.