Tag Archives: LivingSocial

LivingSocial to Overtake Groupon?!

26 Mar

According to the article on Mashable by Sarah Kessler, “LivingSocial Says it Will Overtake Groupon in January 2012,” among all of the group couponing sites, none of them are serious competitors to Groupon except the up-and-coming LivingSocial site.

LivingSocial was launched in December 2009, and has a total of $232 million in funding — $175 million of it from Amazon. These numbers might seem miniscule when compared to Groupon’s $950 million, and $25 billion worth, but according to the U.S.-market revenue data for both sites, compiled by LivingSocial, it’s been enough to seriously challenge Groupon.


The statistics used to compare the two companies were compiled using variables such as daily publishing, the price of their deals and the number of deals they sell. LivingSocial’s market share has been steadily increasing since 2009. Currently, for every $10 of deals sold on either platform, $4 of them take place at LivingSocial.

LivingSocial has its Escapes deals unlike Groupon, which is their main competitive advantage. Deals on vacations are more appealing than receiving 50% at a restaurant, and LivingSocial has realized that. The company has also realized that it takes time for users to decide whether they want that vacation package or not, so the deadlines to purchase are longer than their daily deals.

If both companies continue to grow at their current rates, LivingSocial’s portion of sales will overtake Groupon’s in January 2012. Groupon’s decreasing market share does not  indicate decreasing sales, however, the change is more due to the fact that LivingSocial is growing at a faster rate than Groupon.

As the company starting with 100% market share in 2008, Groupon started the entire group buying market, but it wouldn’t take long before competitors jumped in to take a piece of the pie. Fortunately for both companies, the market is continuing to expand at rapid rates, and is expected to grow 138% to 2.7 billion this year.

Advertisements