Ever since the daily deal market erupted in this country, one thing has been seen as standard: that Groupon leads the market and everyone else plays catchup. Well, as many other ecommerce companies have seen, that is just not the case in Quebec.
Since their entry into the province, Groupon has underestimated the Quebec market, its uniqueness, language, operational nuances, etc. They are not alone; most ecommerce and retailers underestimate the work needed to be successful in Quebec. Groupon even manages their Quebec operations not from Canada, not from Chicago, but from France. Something that is rather rare for such a North American brand. Local marketing, local hires, operational issues, technology platforms are all managed from France and have shown a significant disconnect in the past from Groupon’s North American operations. This has cost Groupon the leader position in Quebec since day one. Although Groupon is #1 in daily deal sales in Canada, they are second in Quebec. At one time they were 3rd or 4th. The leader, of course is still Tuango…But as this post suggests….for how long?
Tuango has built a significant leading position in this province over all other competitors. This is so not because their service is better or they have more deals. The number one reason why Tuango has been so successful in Quebec is mainly due to their team; the ability of their founders and the team they put together. The other reason? Their rather large email database in Quebec. Since day one, Tuango has understood how to run an eCommerce business in Quebec. There are nuances that exist here, in terms of marketing, sales and operations, that other regions simply cannot appreciate or understand. As such, Tuango at one point had well over 50% market share in Quebec within the Daily Deal sector. The likes of Groupon or Living Social were still trying to figure out how to be successful in Quebec while Tuango had already figured that out a long time ago. Tuango has since grown rather well, has acquired some competitors along the way and expanded into travel and product sales as well.
Groupon’s growth in Quebec
However, times have changed, competitors have adapted, and Tuango’s growth has certainly not been what it once was and their market share has dropped. In fact, not too long ago Groupon sales in Quebec were so far behind Tuango that we wondered if they even cared about being in Quebec. That concern has faded with the impact that Groupon is now making in the province. Even though they are still managed by Groupon France, they have become rather persistent in their goal of growing their sales in Quebec, Montreal of course being their largest market. Groupon seems to have more people working just for the Quebec market than it has for the rest of the country. They have also integrated their product lines very well into their sales model for Quebec; they continue with their local offers, they have grown their product sales substantially in Quebec and are now chipping away at the travel business by promoting travel to Quebec consumers. Their persistence has paid off by increasing sales to such a point where they may very well overtake Tuango as the #1 Daily Deal provider in Quebec in the near future. Something most of us in the industry would not have anticipated.
Now, Groupon still has plenty of room to grow in Quebec and Canada as a whole. Atleast we see it based on our own evaluations. We see that Groupon can easily double their sales across the whole country by implementing some specific operational changes as well as initiating certain marketing strategies that they are presently not doing in Canada. (more on this in a future post). In Quebec, however, we believe they can easily triple their present sales and become a dominant eCommerce force in the province along with Tuango.
The rise of the “Others”
Groupon is not the only deal provider in Quebec that is growing and taking market share away from Tuango. Ever since Tuango and Wagjag bought out Deal-of-the-Day from RedFlagDeals/Yellow Pages, there really has not been another strong Quebec based competitor other than Groupon. Again, things have changed and the following 3 deal providers have shown resilience and growth in Quebec.
- Teambuy; the country’s 2nd largest deal provider. Their Quebec operations have grown nicely over the past couple of years. They are now 3rd or 4th in Quebec. Based on our evaluation, they could easily increase their Quebec based sales by a factor of 3 times, if they initiate certain strategies focused on Quebec.
- Goyub: a deal provider not that well known but certainly able to execute. They are also 3rd or 4th in Quebec battling it out with Teambuy for that 3rd position.
- Vie Urbaine: consistently, slowly growing its footprint across Quebec. They are hungry, have a solid team and have now grown to be a very close 4th right behind Teambuy and Goyub and it would not surprise me if they leaped over them to be in 3rd position given their focus on continued expansion.
The deals sector has certainly NOT slowed down for some companies in Quebec. Add to that the continued growth in the overall Coupon commerce sector and you have a Deals & Coupons industry that is very vibrant and profitable. Although Tuango continues to have a nice lead, they certainly do not have a dominating position as they once enjoyed. This may motivate them going forward to be even bolder in their plans to grow as an eCommerce powerhouse in Quebec. Groupon is now right behind them in Quebec and stronger competitors in Teambuy, Goyub and Vie Urbaine are present to satisfy consumer demand. Why are these other competitors growing? Well, Quebec consumers typically have the least choice when it comes to eCommerce or mobile commerce options in Canada. The market is now catching up to the large demand from Quebec consumers and the companies mentioned above are executing well to capture that demand. Tuango, Groupon, and Beyond The Rack, more than most however, are proving that Quebec can sustain a healthy eCommerce environment beyond the usual eCommerce stores of Amazon, EBay, Walmart, etc…
Frankly, given all the governmental and political nonsense happening in Quebec, (Charter of Values debate, Corruption scandal, Language issues, Investor confidence, Quebec debt, etc) reading and writing about ecommerce growth, Startup growth and business growth in Quebec is rather refreshing. Companies and startups like Tuango, Groupon Quebec, Beyond The Rack, Teambuy, Goyub and Vie Urbaine are shining examples of ecommerce/digital growth in the province that produce tens of millions of dollars in sales and hundreds of jobs. More media attention should be provided to them given their successes.