[UK] With over 12 UK competitors, it’s no surprise that the Groupon clone fall-out has begun.
After writing about the group buying aggregator Deal Romeo earlier today, one of our readers alerted us to the fact that Groupon clone Snippa, which launched as recently as March 9th this year, has entered the deadpool. A notice on the site reads:
“Following careful consideration we have decided that the group buying space in the UK is too crowded to allow us to offer an outstanding product to both our merchants and customers.”
Which just about sums it up as well as we could.
This is from a company that only a few weeks ago sounded pretty confident of its ability to stand out from the crowd, having invested more heavily than its competitors to secure the best deals for its customers, co-founder David Hobart told me at the time.
So why the sudden turn-around? I’ve put that question to Snippa’s other co-founder, Tim O’Shea, and we’ll update the post should we get a reply.
Update: Here’s O’Shea’s reply, which I think could prove a useful case study for other Groupon clones.
On launch we had a couple of technical problems which gave us a chance to review the business as a whole. Where we had hoped to be able to offer our customers fantastic deals, the flooded market has meant that conversations with merchants has been more about what commission we are charging than how much discount they can offer prospective customers on mass…
So from our prospective it looked less and less likely we were going to be able to [do] what we had set out to, be a great destination for truly fantastic deals for our customers. I think we could have made the business work but this would have been a strategy of keeping going for 2/3 years whilst the competition slowly dwindled at which point we may be [in] a position to negotiate better deals…
In a weird way I think the amount of competition maybe isn’t good for the model, one dominant player would be able to get better deals for the customers.
Finally the prospective of Groupon coming to London plus MyCityDeal so financially strong we simply, short/medium term, couldn’t keep up with their huge customer acquisition budgets. Where we had hoped for first moving advantage we were too slow to market.
Our team is still intact, we are keeping the company going, but working on some new projects.