LivingSocial Going Outside of Daily Deals, Helping Merchant in Developing Business
Amir Karimuddin - 27 June 2012
LivingSocial is one of big daily deals services in the world. Basing in Washington DC, LivingSocial owns many networks, including Indonesia when acquired Grup Ensogo under DealKeren. Although the main focus of its business is daily deals, doesn’t mean that LivingSocial has a blind eye for other business chance in other line.
When helping a merchant to prepare its daily deals solution, LivingSocial saw that many merchanct which use the difficult point-of-sales system to track buying activity and payment process by the customer. Here, LivingSocial saw a new chance to break the status quo.
As reported by Washington Post, LivingSocial will broaden its business line to help merchants, especially the SMEs in relation to digital marketing, customer loyalty and point-of-sales operation. At the end of last year, LivingSocial formed the Merchant Solution Division which led by former PayPal’s executive, Dickson Chu. According to Chu, they are currently working on some products and will launch it in the next weeks with chosen merchant.
By entering new business line, LivingSocial will create a new demand and of course, new competitor. When during this time daily deals segment only compete with Groupon, in this new line, they will compete with many similar software developer. LivingSocial means to conquer the service through and through for customer loyalty and digital promotion like daily deals.
The project done by LivingSocial’s headquarter is not well known yet by the LivingSocial in other countries. When we confirmed this to LivingSocial Indonesia, they admitted not knowing about it. According to our source, the local office will choose to wait for the result of the headquarter’s pilot project. When they feel it as a success and can be implemented by the offices in other countries, the local office has 6 months to implement it.
Some opinions said that this new business is LivingSocial’s effort to get away from daily deals business which only offering discount for new member. Not to mention the critics that some daily deals programs for small enterprise is not giving benefit but allegedly causing losses. Answering this critic, the CEO of LivingSocial, Tim O’Shaughnessy stated that based on the survey done by the company, 54% of the merchant said that they received profit while the other 34% reach break even. It means that the business which experience loss is “only” 15%.
To be sure, according to O’Shaughnessy, the new things done by the company in the future is where discount is no more the main driving force.