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Bad news for bargain hunters?

Johannesburg - Bargain hunters were no doubt shocked when Groupon announced that it was shutting the doors to its South African offices last year.

The international group discount business removed itself from a number of other countries too, including Morocco, Panama, the Philippines, Puerto Rico, Taiwan, Thailand, Uruguay, as well as European markets in Greece, Turkey, Ukraine, Portugal, Switzerland and Austria.

There was a brief lull in the South African online group discount market, while the likes of Daddy’s Deals, Wikideals, DealZone, BulaDeals and group-buying aggregator Deal Africa continued to trade with more or less the same deals and strategy.

But then another group-buying website, Hyperli, entered the market in November, created by some former Groupon SA employees.

“We have seen significant traction since our launch with month-on-month stats increasing both from customer and engagement metrics as well as revenue,” says Conor Copas, marketing manager of Hyperli, without going into the specifics.

He maintains that Hyperli will differentiate itself from Groupon this year.

“We have some pretty exciting plans for 2017. Where there is fatigue in the daily deals space, we aim to revolutionise our unique product offering.

"We are more focused on creating moments of perfect engagement between merchants and customers with our end-to-end local commerce model,” he says.

But will Hyperli and the industry survive?

With Groupon struggling to maintain the momentum and popularity it once enjoyed, the question remains whether companies with similar business models will in fact survive.

Stats from Experian show that bargain hunters are falling out of love with daily deals and group buying, with the likes of Groupon and LivingSocial having experienced a 22.8% decline in recent years.

Arthur Goldstuck, media analyst and commentator on Information and Communications Technology, thinks the industry’s days are numbered if it doesn’t become more innovative.

“The death of the biggest player in the local market and the stagnation of its parent company globally tells me the segment is in poor health.

"A few doses of the right strategic medicine could well revive it, but it’s not yet obvious anyone has found that medicine,” says Goldstuck.

But Copas argues that the industry has a future: “It is a trillion-dollar industry referred to as the last white space on the internet.

“No one has yet made a dent in an industry that is forecast to have a breakthrough in the short-term future. Playing in such a ground-breaking space is ultimately what makes what we do so rewarding.”

He adds that the company additionally benefits from having adopted lean start-up tactics with a current staff quota of 20.

“We are actively employing the top talent in South Africa and expect to double our team size in the coming months,” he says.

Goldstuck maintains that, ultimately, it will be the market that decides whether discount websites still have a place.

“It doesn’t mean they shouldn’t try, though. The local Groupon founders have obviously learnt enormous lessons from their experiences, so it will be fascinating to see how they apply them,” he says.

Only time will tell if the Hyperli team can strategically pull off what Groupon couldn’t and go the distance.

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