Will Indian clones of Groupon able to raise fund?

7 Apr, 2010  Start ups, VC Investment

BBmydalaKoovsGrabbon

Groupon raising close to $30M triggered its clones to emerge globally, there is a groupon clone in every continent barring Antartica. Groupon clones in UK, Russia and Germany have successfully raised capital from VC firms, question arises here will Indian clones can also taste the success like their european counterparts.

Lets look at the grouping portals in India – Grabbon, Koovs, Mydala, Snapdeal, Wanamo, Mobstreet, BindaasBargain.

In my view Groupon clone should feel highly fortunate if they able to raise funds and bring in VC to their board.

a) No clear differentiating factor – There is no stand out and clear differentiator, every clone works in same way, only differentiating factor i see is location/city they are serving and some clones are justifying the distinction on the basis of numbers of fans in their respective facebook page.

b) No entry barrier – One really don’t need any extra skill sets to come out with one more version of clone, with the help of 2-3 developers and 1lac of investment one can up and run the clone. Absolutely no entry barrier.

c) Deals aren’t lucrative – None of the clones are focussing on a particular vertical, most of the deals are related to restaurants, weekend package, spa etc. Interestingly none of them are focussing on the lines of Nimblebuy, its also a groupon clone founded by my ex CTO at Andale Prashant Nendungadi , it deals only in electronic items.

d) Lean Profit margin – how much margin grouping site makes on each deal? my view is somewhere around 10-15% and additionally they would be taking a flat fee as advertising charges from the merchant. So if a grouping site sells close to 500 deals then they are doing some business which may attract a VC, but unfortunately they tend to sell on an avg 25 deals/day.

so what do you think about Indian grouping sites, share your views.

-Hitesh, vcBytes.com

  • http://marketingchitchat.wordpress.com/ Kanupriya

    And I agree with your views. Most of them are same in concept with nothing new or different in offering. Not even sure how many of them are doing well in Indian market.

  • Subba Rao

    My comments:
    Not necessarily in support or against above observations.
    They are just into 3 months of business. So let us not pass the judgment yet.

    Profit margin of 10-15% is very high. After giving away all the discount to the user, the retailer does not have anything left to give to these sites. Only plus point for the retailer is the advertising he gets.

    Except group buying initiated through facebook pages there is no big differentiating factor these sites have from the model practised by India Today Group, Deal of Day by IndiaVarta or DC Deal of Day

  • ankit kapur

    I believe this concept is bound to work. It is too useful for today’s frugal metropolitan crowd. Its good that this concept has been brought to India. Too bad, that It has been brought in such a copy-cat type manner. For e.g.:
    If you compare the Groupon with any other Indian versions of collective buying, not only the business model but the entire site in copied. That is real hilarious :D They can sure be called real copycats. chekout snapdeal, grabbon, bindaasbargain. Pathetically copied.

    Some sites do provide some real value deals. They have to be given some credit like koovs.com and mydala.com.

    One more problem here is merchants not respecting the agreement. A deal bought from mydala in delhi was denied by the merchant completely.

  • http://www.snatchdeals.com Narendran Gunasekaran

    How is the scope for a deals aggregator site? There are a few in the market already (like http://www.snatchdeals.com, of course :) )..