Nation Media Group’s classified deals site Nsoko Deals, will turn tables in Kenya’s e-commerce sub-sector as major players try to see where the juice is.
Dormant classified site, Nsoko.com had all the resources and name to take over the market but the September 2009 launched portal has not been as mainstream as the group’s media arms. The parent firm’s revenue and size seemed to work to its disadvantage.
Nsoko Deals is likely the firm’s last push to draw both users and sales to its online platform, turning a normal marketplace into a go to place for everything deals from electronics, to fashion and travel.
In 2011, Daily Deals websites such as Groupon and LivingSocial made around £300million in sales in the year’s last six months. The popularity was said to be due to retailers need to ‘dispose off’ old stock and also give their returning customers discounts. Groupon, with operations in over 45 countries reported it had over 30million active customers in 2011. It reported double revenues from $172.2m to $506.5m in October, November and December 2011 but made a loss of $42.7m in the same period.
Another survey conducted by Rice University found that only 20 percent of deal users come back to the store after their initial purchase. the survey said photographers were more likely to go back to a deal site followed by clients for education-related services and health and fitness. Deals for cleaning services, restaurants and retailers were the worst.
But instead of being pessimist, Charles Gaudet, CEO of PredictableProfits.com, a Small business marketing strategies site said: “Daily deal sites are a double-edged sword, and unless they are structured properly, they’re likely to produce more harm than good.
“It’s important to realize that the daily deal customer purchased a coupon for your business based upon the price of the product, not because they have an intention to continue doing business with you. Once the daily deal customer redeems the coupon, it’s now the business owner’s job to convert them into a repeat purchaser and a lifetime buyer.” Gaudet concluded.
With all the negativity about deals sites, recently launched Ghafla Deals seem to be doing well with the firm claiming over Ksh 700,000 revenue in month one of business.