Just 3 weeks ago we mentioned Snippa, another new group buying website, offering fast-expiring deals in London.
Well, it seems that market saturation has done for Snippa, with this message now appearing on their site:
Snippa is sadly no longer operating as a group buying site. 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.
Tellingly, they then point visitors in the direction of a list of competitor group buying sites. In fact, there’s 10 on the list.
The key to these sites is market share, and it appears Snippa was concerned that they’d wouldn’t be able to get as many visitors, and therefore arrange the best discounts, than their deep-pocketed rivals. In a frank statement to TechCrunch, co-founder Tim O’Shea explained the problems they faced:
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… 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.
This growth in the market has led to the inevitable group buying aggregator popping up – in this case it’s Deal Romeo, which currently aggregates the deals from 12 group buying sites.
I can completely see this market saturation taking place. A similar thing happened with voucher code sites with only a few staying at the top of the game such as MVC