Attack of the Groupon clones – Here comes Snippa

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[UK] Now this is getting a little silly. Snippa, another UK-based Groupon clone launches today, this time from two experienced entrepreneurs: Tim O’Shea, founder of Blurtit, and David Hobart, founder of PureContent. The company is self funded by O’Shea and Hobart from their existing businesses, operating with a six person team headquartered in North Walsham, Norfolk.

Snippa, which is focusing on London initially, pretty much follows the usual group buying model: Each day various deals are on offer for things to do in the city, with a minimum number of buyers required for the deal to go through. If not enough people sign-up within the allotted time period then the offer is withdrawn and no money changes hands. The idea is that those interested will spread the word via email and social networks so as to increase their own chances of getting a bargain.

Although it’s here where I’m beginning to question the Groupon model as a whole, whereby the perception may be far more important than reality with the tipping point required, arguably, nothing more than a marketing gimmick designed to make the offers go viral – see below.

Snippa says its main differentiator from the plethora of competitors, including the extremely well funded US-based Groupon, along with others such as Berlin-based MyCityDeal or the just launched UK-based Groupola, is that it runs deals for more than one day, and has more than one deal live at any time. It also claims to have invested more heavily in securing the best deals for its users.

On launch day, the deals on offer include an £80 Super Car experience worth £160 plus a free 4X4 Fun Experience at Vision Motorsport, with a tipping point of 96 buyers. Or a Champagne Afternoon Tea for two for £35 (RRP £60) at Eric Lanlard’s Famous Cake Boy patisserie, with a tipping point of 30 buyers.

So what about the accusation that the Groupon-model is nothing but a marketing gimmick. I’m basing this possibility on the fact that many of the offers being advertised on group buying sites require as little as 25 people to sign up to make the offer stand. That’s not a huge number to back up claims of economies of scale to provide room for a 50% discount. So what exactly is going on?

Naturally, Snippa’s COO Hobart refutes these claims, although he says he can “understand people drawing this conclusion with the current influx of startups into the group buying space, most of whom seem to be operating deals with low tipping points, but in turn the offerings are not deals we would choose to publish.”

In other words, competitors might be using group buying purely as a marketing gimmick but not Snippa – although he would say that: “Tim and I truly believe the tipping point is inextricably linked with the best deal that we can offer to our customers. In our experience the minimum buy-in is in place to protect the merchant more than anything.”

Perhaps more noteworthy to the growing number of UK-based and other European Groupon clones is Hobart’s different experience in dealing with American merchants compared to British ones.

“From my experience with, American companies are more comfortable to experiment with new marketing channels and are happy to operate break even or loss leaders for ‘customer acquisition’. This in turn offers companies like Groupon the ability to get great deals whilst achieving high commission rates. We have found the UK market place is not as open in this respect. In this difficult business climate merchants are reluctant to offer large discounts without the promise of a significant uplift in footfall and a guaranteed minimum return.”

Hobart isn’t saying that the viral aspect is unimportant to the group buying model’s success but argues that from a web user’s point of view, they are just as likely to send an offer on to their friends if they think it’s a great deal regardless of whether the tipping point is set low or high. Additionally, he says, in the UK Twitter seems to be much less significant at this stage.

“… a Twitter search for a Groupon deal vs any of the UK clones reveals a large difference in tweet volume, the UK deals are not getting as many Retweets. I think time will tell if the reason for this is the UK isn’t so addicted to Twitter yet or that the current UK deals just aren’t that attractive.”

  • The Swedish Chef

    FYI, snippa is a nickname for vagina in Swedish. Maybe the founders should have browsed wikipedia before going for that name:

  • Jason Duke

    I must say that both Tim and Dave are extremely experienced in the UK dot com entrepreneurial space and I have to agree with Dave’s views he expresses above.

    “Is he right?”, well time will tell but I do hope that the UK marketplace does open up to new marketing routes like this and group buying is a way for those forward thinking companies to increase their customer base whilst delivering me more money in my pocket than I would have had otherwise, whilst still doing fun stuff!

  • Da Swede

    In Swedish, snippa is another word for female genitals. Maybe the founders should have checked Wiktionary before going for the name…

  • Grant

    Great website!

    You mite also want to check out London’s Best

    They run the same way but just in London.

  • mike is doing the same thing in london

  • lawsuit too

    Are the class-action lawsuit rules the same in the UK as in Illinois?

  • Joao Belo

    Interesting business models keep sprouting up and copycats soon follow. Yet we know that being first to market isn’t exactly an assurance that you’ll end up being the better product. If Snippa does well in London – and it may very well do that – then it can be a very powerful regional player that can easily expand to other countries/cities with heavy social media usage.

  • Geoff

    I live in LA and I use SocialBuy a lot – they launched earlier this year and, like Snippa, have more than one deal at a time and have them available for more than one day.

    It may be a sort of marketing gimmick, but it’s one where I save money so… can’t argue there.

  • Bill that launched 2 weeks ago is also doing more than one deal in 8 cities so far. Daily and weekly deals, so whats new here?

  • Elena

    Add Russian too

  • julian

    Dead already. Check out their homepage. 17 days from launch to closure!

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