LivingSocial is a very close competitor to Groupon.
Unaiz Kabani, the data whiz at Daily deals aggregator Yipit, tells us that Groupon’s market share dropped to 54% in September, down from 57% in August. Meanwhile LivingSocial was up to 22% from 19% in August.
Despite this heated race, Groupon barely mentioned LivingSocial in its IPO roadshow. Can you even spot it on this slide from the presentation?
But what do Groupon execs really think of LivingSocial? While we were talking to sources for our story INSIDE GROUPON, we got a pretty clear picture.
- “LivingSocial was discussed in every management meeting. It always seemed liked Groupon was winning in the markets that mattered, except in D.C., which is LivingSocial’s home base.”
- “I would say LivingSocial was the main driver behind the huge marketing expenses because the idea was always, lets have more subscribers and thus more sales, then them.”
- “Internally, the company rhetoric to employees was we’re way better, way cooler. [It was] a pep rally approach – they’re the rival the team can beat. At the management level, I would say they were taken seriously.”
- “LivingSocial had the biggest influence when they would do something before Groupon. They launched their instant deals before Groupon Now got launched and that was kind of a blow. They did their escapes before we had a travel channel and that was a blow also. “
- “The perception was that they launched an inferior product so ours was better. Just as a consumer, their mobile platform is far inferior.”
- “Having that first mover advantage was huge. It just always seemed like Groupon maybe had deeper pockets and could take advantage of the scale they thought they needed, then LivingSocial could.”
- “They think they’re a lot smarter than LivingSocial. Andrew thinks about LivingSocial all night and all day. He totally obsesses about them.”
- “The Whole Foods thing drove him crazy. Groupon was bidding on that too, and basically LivingSocial went in and fully subsidized the deal and said “we’ll pay the whole thing, we just want Whole Foods on our roster.’ And you saw the number, the LivingSocial thing really worked for them, it really lifted their top line.”
- “They’re a great company, a great fast follower. I don’t know what they’re worth – maybe $3 billion to $6 billion dollars – which is amazing [since it] didn’t exist 3 years ago.”
- “There’s scale advantage that they don’t have; they don’t have a global presence. “
- “I think they get gobbled up by one of the big four – Apple, Amazon, Google, and Facebook. Or maybe they even get acquired by Groupon.”
- “[If] Groupon is worth $15 billion or $16 billion then maybe LivingSocial is worth 4 or 5.”