Amazon Toying With Group Buying Ideas
A word of caution for mama LivingSocial: Amazon toying with group buying ideas
In the wake of great response from the deal hunters to its three-month infant deal aggregator, Amazon is poised to step in full throttled in the daily deal space by launching its own deal a day site by this yearend.
Media reports are doing round in the daily deal industry that the worlds largest online retailer has already selected Chicago as the launching pad of its independent group buying site.
Wall Street Journal got the hunch from its email communication with the retailers official who expressed the companys desire to start up its own daily deal company later part of this year.
But, there is also a marked fear the latest debt crisis that is spooking consumers and stock investors in US may frustrate the plan.
Will the new frightening data tweak 2011 ecommerce forecast that shows 18 per cent rise in revenue this year? The question is yet to be answered.
On the basis of the forecast, however, Amazon continues to reign supreme in
the global online shopping market. Amazon (NASDAQ: AMZN) racked up $34bn in 2010. Total ecommerce revenue stood at about $572bn.
The internet retail behemoth continues to hold major share as compared to small online retailers operating in the vortex of the fierce competition, highlights a JP Morgan report.
Three-month ago, AmazonLocaldeals began deal aggregation in Boise, Idaho under the patronage of Groupons arch-rival LivingSocial.
Not much later, the deal aggregator had expanded its coverage destinations to 14 cities including Los Angeles, Palm Beaches, Chicago, and Seattle offering at least 50 per cent off list price.
AmazonLocal is quickly expanding to other cities and LivingSocial is happy to assist in bringing together Amazons millions of customers with the thousands of local merchants that LivingSocial has a direct and ongoing relationship with,
said LivingSocials spokesperson in an email to WSJ.
And why not? After all, Amazon poured in a huge sum of $175mn in the Washington-based social shopping website perhaps last year.
The help might also intend to saddle a Trojan horse with all weapons to wage war in the Windy City with Chicagoan Groupon.
Yet, there is a note of caution. Amazons daily deal site may shape in Frankenstein for the mama LivingSocial that for now albeit has strong standing in the daily discount market with 10 million subscribers in over 120 markets across US, UK, Canada, Ireland, and Australia.
Unlike its old deal venture dedicated for elitists MyHabit.com that offers only luxury and home dcor deals, Amazons deal collector goes smart to cater to all segments of customers by purveying deals of restaurants, spas, leisure, etc.
Moreover, the business model of AmazonLocaldeals is quite attractive for the group hagglers since besides discounts it also provides its millions of online shoppers with reward points to be redeemable in cash or in-kind incentives.
In short, all seems to be in favor of Amazon that can make an imposing entry in the daily deal market in collaboration with an array of merchants. That said juggernaut online retailer can pose direct challenge to leaders in the group buying industry.
by: Matt York
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