Yahoo7 buys Spreets, bubble inflates
We got cheap cupcakes and haircuts, today only
In a deal reportedly worth $A40 million, the old-new media hybrid Yahoo7 (jointly owned by Yahoo! and the Seven Network) has acquired the Australian group-shopping site Spreets.
The price has invited media speculation that group buying sites are forming a bubble. Spreets, after all, is only a year old. However, it claims 500,000 members with 274,000 vouchers purchased in that time, perhaps driven by Australian consumers feeling hard done by in the world of traditional retail, which has been criticized as failing to compete with online businesses.
Spreets, as with other group shopping sites, appeals to the kind of customer who checks their letterbox each day in case they’re the lucky recipient of a bright yellow package containing one-time-special-offers from local hairdressers, lingerie shops, cupcake shops and so on.
In the statement announcing the deal, Yahoo7 said Spreets had delivered “more than $40 million” worth of savings to Australian consumers in its short life, apparently shaking up Australia’s $20-billion-per-month retail trade sector.
Spreets – and other group buying sites such as Zazzi, SoldSmart, OzStock, Cudo, Jump On It, Catch of the Day, Overship, Shopping Square, Crazy Sales, 1-day.com.au, Liquid Deals, Mighty Ape, Scoopon, Our Deal, Daily Labels, Go Deals, Birdie of the Day, Ouffer, Daily Gizmo (does this start to sound like an overcrowded market?) – are local imitations of US giant Groupon, with media companies already active in the market. The Ten Network and News Limited are backers of Our Deal, while PBL Media owns Cudo, which is marketed through the Nine Network.
The sector is assessed as being worth $100m annually, and already, aggregator sites such as www.allthedeals.com.au are springing up to take advantage of what they see as the flaw in the “one deal per day” group shopping model. ®