Deal-of-the-day websites are currently the hottest thing in the town, and everyone wants to have a piece of the cake. Even as Groupon continues to grow at a tearaway pace, regional Groupon clones are also flourishing. SnapDeal, a popular Indian deal website, and the largest competitor of the Groupon owned Sosasta.com, has raised $12 million in an investment round led by Nexus Venture Partners and IndoUS Venture Partners.
Snapdeal currently serves 35 cities across India, and claims to acquire a new subscriber every 8 seconds. For SnapDeal, we will be looking at expanding to international markets in South East Asia within the next two quarters”, Kunal Bahl, CEO of SnapDeal’s parent company, informed AlooTechie.com.
Nevertheless, there are legitimate concerns regarding the long-term viability of the business model of these deal websites. According to multiple reports, the absurdly high discount rates coupled with poor customer retention often means that the service providers advertising through Groupon and similar websites end up with a sore deal. However, investors are clearly bullish about the prospects of this growing niche of services. What is your opinion? Do you believe that deal-of-the-day websites are here to stay, or are they being over-valued? Sound your opinions in the comments section.