Daily-deal services will generate $3.93 billion by 2015

 

Here is an excerpt from advisory company BIA/Kelsey out of the US. They have recently published an analysis on Daily Deal/Group Buying growth in the US. Although Canadian numbers are not available, this can provide a good perspective on the industry as a whole. The full post can be found here:

BIA/Kelsey, adviser to companies in the local media industry, released a new forecast on U.S. consumer spending on deal-a-day offers, which the firm expects will grow from $873 million in 2010 to $3.9 billion in 2015, representing a 35.1 percent compound annual growth rate (CAGR). While this is the most likely growth case, BIA/Kelsey suggests a number of variables will have an impact on the actual development of deal a day, such as growth in the number of cities/sites, registered users, transactions per year for the average user and the average price per transaction. Considering these variables, deal a day could grow to as much as $6.1 billion by 2015 (47.4 percent CAGR), while a very conservative outlook pegs the space at $2.1 billion (19.7 percent CAGR).

“Deal a day has experienced incredible growth during its three-year incubation period beginning in 2008,” said Mark Fratrik, vice president, BIA/Kelsey. “We expect this to continue as companies in the space are rapidly adding markets and increasing total user count. They are also subdividing existing metros to provide deals closer to where users live, which we believe will help offset any drop-off that may occur due to consumer fatigue as the novelty of the form fades.”

While Groupon and LivingSocial lead a marketplace of 200-plus players, the broader field includes destination sites and white-label providers working with local media providers such as directory companies, newspapers, and radio and television operators. As of March 1, 2011, BIA/Kelsey estimates there are 178 cities with deal-a-day sites reaching 102 million people in the United States.

“The combination of fun offers and convenience makes deal a day a very attractive way to reach local users, and for publishers to work with small businesses,” said Peter Krasilovsky, vice president and program director, Marketplaces, BIA/Kelsey. “We expect to see some shift in local media spending resulting from the adoption of deal a day by local advertisers. We also believe that deal a day doesn’t exist in a vacuum. It will become a part of the growing deals and offers landscape.”

Numbers and growth for Canada are yet to be determined.

Source: http://www.biakelsey.com

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