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As Groupon.com takes the nation by storm with their $25 Gap deal (with a value of $50) and breaks sales records with an $11 million sweep, other copycat sites are popping up world wide trying to capture this great idea's luster. Mexico and Latin America, young and economically fertile, are just the areas.
"The 'group sales' market is growing, has been a boom around the world, mainly in the U.S. and Europe and Latin America now reaches the hands of many actors," said Josue Gio of CEO of OferCity.com.mx, a new Groupon-like site that was just launched on Monday in Mexico.
OferCity, although just launched, is already boasting more than 5000 members and making offers in Queretaro and Merida in Mexico.
According to Josue, today's Mexico's e-commerce market value is estimated to be around $2.5 billion US Dollars with a potential growth of 70 percent. Additionally, "the behavior of young people is changing with access to credit cards and Internet. Market penetration about 30% with approximately 30 million Internet users in Mexico, coupled with increasing competition from companies like Megacable and others that are offering services such as tripleplay, it is expected that for 2014 is 50%, increasing the number of users in Mexico and thus e-commerce."
It is no wonder that in the last few months other Groupon-like "group sales" sites are popping-up or reaching south of the border into Mexico and Latin America. Last May, Cuponzote.com was launched, followed by BuzzUrbano.com in June -- both in Mexico. In July, Groupon.com itself announced their efforts of reaching Latin America by opening an office in Chile. In August, ClickOnero.com is expected to be launched in Mexico.
"Latin America is a big and diverse market, and we are excited to bring the concept we pioneered in North America to the rest of the world by delivering deep savings to customers while helping local merchants find new customers. We are especially interested in catering to the unique cultures and interests of each market and that's why they are managed by local teams in different markets," said Rob Solomon, President and Chief Operating Officer for Groupon.
According to recent studies by IAB Mexico (Interactive Advertising Bureau México), online advertising in Mexico grew 24% in 2009 with an investment of 2.345 billion dollars in interactive advertising. Also figures from AMIPCI (Mexican Internet Association/Asociación Mexicana de Internet), there are 30.6 million Internet users in Mexico. Of those Internet users, 39% belong to socioeconomic levels Upper, Upper Middle and Middle class.
"On the other hand," said Gonzalo Alonso of Co-founder of ClickOnero, "the IAB's LATAM ( Interactive Advertising Bureau Latin America) latest figures indicate that by adding Argentina, Brazil, Colombia, Chile, Mexico, Peru, Uruguay, Puerto Rico and the Dominican Republic, there are 166 million Internet users, and that the average penetration Internet in these 9 countries is 37%. Online advertising investment in the region continues to grow significantly in 2009 reaching $ 880 million."
Conquering new worlds comes with its challenges, especially when you combine it with economics and new online business concepts. For Groupon, the challenge also includes studying and learning the ways of a new culture.
"Relative to North America, one of our key challenges is consumer access to credit payment options. We will address this by adopting alternative local payment methods and building trust through local partnerships and world-class customer service, " explained Rob Solomon.
"Our biggest challenge is really the Mexican mentality that sees the advertising of any kind as an expense and not as an investment. Getting the user is easier. To reach and convince the supplier that this online marketing tool and "social ecommerce" is a reality and very effective is not so easy," says Josue of OferCity.
Erantzeri Corona, one of the founders of BuzzUrbano.com seconds that challenge. "Our biggest challenge is the lack of an 'online buying' culture on the part of internet users . . . Unfortunately the internet is still not widely seen as an effective communication channel," said Erantzeri.
Gonzalo of ClickOnero paints a rosier picture saying that Mexican businesses are willing to negotiate to participate in the action. However, he still admits the
