After Google, Facebook To Launch Its Groupon Clone — Deals

Just a couple of days back we reported Google Offer has been made live. This initiative by Google was an attempt to match the pace of Groupon’s juggernaut like advancement in the group buying industry. If you were thinking that you’ll enjoy match up where one outweighs the other, then think again. There’s a third fighter waiting to storm the ring and that’s none other than Facebook, the social networking giant.

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Facebook first gave a hint of this new venture earlier in March when the company started allowing its users to sign up for the Deals service. At that time Deals was integrated with Places, a model which allowed a Facebook users who checks in at local businesses using Facebook Places, to avail deals offered by the business.

The previous model was more of a Foursquare competitor rather than a Groupon clone. But, the model being launched now, competes directly with Groupon and Google Offers. The social network has said that it will begin testing this service, which will provide its users with local discount deals, in five zones — Dallas, Austin, Atlanta, San Francisco, and San Diego where these deals will be available.

Emily White, Facebook’s director for local told New York Times, “You can receive Facebook deals via e-mail. But if there is a deal that is good for you, it will likely show up in your news feed at some point in the day.” The social network wants to integrate Deals within the social experience of Facebook. The company wants to make itself more than just a platform to share deals with friends through the News Feed. “A lot of deal sites get that deals are social. But I wouldn’t say they are really well integrated with Facebook,” added White.

There was some controversy that got sparked when White said, “It is first time it(Credits) has been used to purchase a voucher that is redeemable for real goods”, while stating that Facebook Credits could be used to purchase deals. This seemed to confuse people as many thought that real goods could be bought by directly using Credits. Facebook PR Team cleared the air with the following statement:

You mention that Emily White says, Deals will be the first product that uses Credits for real goods (rather than virtual ones in games). You can’t use Credits to directly buy real goods. You can use Credits to buy Deals, and you get a voucher that you can print out and take to the merchant to redeem your deal. But you can’t use Credits to actually buy a real good. Might be confusing to some people.

With Facebook entering the group buying arena the scenario is expected to change quite a bit. Groupon and Google need users to come and sign up for their services. But, Facebook can get the same done by allowing its users to click just one button. Moreover, deals will be sent to the News Feed, so there is a minimal chance for a user to miss it. This is more evident as the screenshots that Mashable has acquired, show that there will be a separate app for Deals which can be accessed from the homepage itself.

But, before they can roll out deals, Facebook needs to build a merchant database which can compete with that of Groupon’s. Something tells me it already has this taken care of. If you combine the databases of Pages and Places, it would be difficult to find a local business that is not featured on Facebook. Even if there are businesses which are yet to embrace Facebook, the social network can use its huge support teams to rope them in as well.

The other advantage that Facebook would have is its ability to understand the nature of its users. Previously, Facebook had implemented this feature which has allowed it to show updates from games and apps only to users who are interested about them. Those who don’t interact with games and apps, are not shown those updates in the News Feed. If Facebook integrates this ability to inform users of deals that they would be interested in, the social network can expect a much higher conversion rate from this new venture.

As we mentioned earlier, other group buying sites and even Google offers, allows its users to share deals on Facebook. But, with Facebook itself controlling it, the nature of sharing would be much richer and more viral. The fact that Credits would be allowed for purchasing deals would also make the difference. Buying a deal every time by providing your credit card details is a pain. Now, you can stock up on Facebook Credits and use it for playing games, watching movies or even buying deals.

What has to be seen now is how the Indian market pans out. Groupon has already made its way into India by acquiring SoSasta but, SnapDeal is still the king. We have to wait for Facebook and Google come to India with their group buying ventures before we can make further speculations. The wait won’t be long as both have functioning offices are here. The social network has a 23 million strong userbase in India, will Groupon’s SoSasta be able to compete with that?

Only future can tell how successful Facebook really is in its attempt at this uncharted territory. One thing is clear though, Facebook is utterly serious in its attempt and is already building its partner inventory which includes names like Gilt City, Home Run, FreshGuide, PoweredByTippr, Kgbdeals, Plumdistrict etc.

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