Groupon Follows LiveDeal's Lead but Without Key Benefits to Users

NEW YORK, NY--(Marketwired - Feb 19, 2014) - LiveDeal (NASDAQ: LIVE) has been in the online deal space for all of six months and already it's a trend setter. LiveDeal's "instant deal" platform, www.livedeal.com, has a number of advantages for both merchants and consumers, including one that Groupon liked so much it chose to introduce a similar version of it. Unfortunately their business model doesn't allow them to duplicate every benefit of the "live" concept, and that's likely because LiveDeal's model was developed to create real-time business, eliminate the middleman and to enhance the merchant, consumer relationship.

Earlier this month, Groupon launched what it calls Deal Builder, a self-service option for local businesses to build their own deal. It's essentially what LiveDeal does every day with DealCentral, so while Groupon is using this as a supplement to its core business model of selling thousands of vouchers per deal, merchants have been flocking to the livedeal.com platform because real-time deals are their central focus. 

Deal Builder does add value to Groupon's platform, but it fails to deliver some key benefits that LiveDeal has turned into strengths. First, while Deal Builder won't expand to food and beverage merchants until later in 2014, one big problem restaurants will face is that the platform doesn't allow businesses to drive traffic when they need customers most. Additionally, the deals on Deal Builder are all one week deals, and once consumers buy a deal, they're free to visit that restaurant when they choose. In contrast, this is what's attractive about LiveDeal's platform; it allows restaurants to create deals exactly when they need to drive business the most.

The platform may be a new addition, but Groupon will still charge restaurants exorbitant fees to broker their deals, and they'll also continue to act as the middleman between merchants and consumers. LiveDeal, however, allows its users to interact directly with the businesses they select from livedeal.com. The advantage to LiveDeal is that merchants can use the money they save to offer even bigger discounts, and consumers never have to leave credit card information on the site.

Unlike LiveDeal's DealCentral, Deal Builder won't allow restaurants to stop, play, or pause deals. This is extremely useful for restaurants using livedeal.com because it lets them adjust promotions in real-time based on actual customer traffic. So, while Groupon is attempting to add additional options, only LiveDeal's platform is giving restaurants the full power and flexibility to run "live" promotions with a host of advantages.

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This article is the opinion of SMMG and was written based upon publicly available information. LiveDeal hasn't endorsed or compensated SMMG for this article.