Fremont: The Better Business Bureau had issued an alert to the public about SaveMore.com, a daily deal site, which according to over 1,000 complaints took money for daily deal coupons, but never delivered. Dealivore.com, a Hyderabad based group buying site, shut down its operation stating that they never wanted to have regrets of having run a business that deliberately provided deals that were not fair.
The world has witnessed over 798 daily deal sites being shut down in the last six months of 2011 due to consolidation and startups closing up their virtual shops. Asia saw the largest drop, with 1,348 daily deal sites exiting the industry, reports Daily Deal Media release 2011.
As the daily deals industry has matured, it has become more costly to win new customers and gain market share. One of the primary reasons being the space is so overcrowded that no one is truly branded beyond a few big names from the industry. Another concern is the amount of money spend on Real marketing. The cost of acquiring subscribers who redeem a daily deal has skyrocketed during the past two years and the cost to cut through the noise created by so many competitors has also gone high.
The business model has not been working for many companies, especially smaller ones that have struggled to make names for them. And so many sold out to larger businesses, or just closed up shop. MSN Mall and Taggle shut down as they found it impossible to withstand the competition in the market and many of the e-commerce companies are selling their products much below cost price to attract consumers. Kalahari was shut down just two years after the launch due to low margin, and there are several more stories lying unsaid.
Daily Deal Media partner Triton Digital polled 60,000 consumers and found 39 percent had never subscribed to a deal program. Of those who do subscribe to at least one site, 28.4 percent glance at a deal to decide on their interest; 19.6 percent read the entire deal email; and 10.2 percent subscribe but consider deals spam and delete them. Major daily deal sites that are very much still in business, meanwhile, are trying to figure out how to expand their offerings to attract new customers or at least some attention. Also, a win-win-win condition for the website, consumers and local businesses is required. Unless everyone wins, it just will not work, the end result being acquisition for closure of the company.
