Discount websites strike gold in summer

Newsroom 02/07/2012 | 08:18

Discount websites are taking full advantage of the summer season, which sees many online shoppers snap up a range of the holiday, beauty and leisure-related products which are now in the spotlight. And with 50 to 60 websites on the market, they have a lot to choose from. Alexandru Creanga, PR & marketing coordinator at website, which aggregates the offers of major discount websites in Romania, tells BR the project has even expanded to Great Britain.

Otilia Haraga

What type of discount offers sell best in Romania?

The best sold offers are those in the holiday and travel, beauty and cosmetics, food, clothes and accessories as well as health and leisure categories. Products in the home and garden range have also posted significant growth over the past half a year. As far as other markets are concerned, we can see there is more interest in offers from the category Going Out or Try a New Experience.

The seasonal factor is visible, especially in the case of holiday and travel, where in summer or close to the long holidays, there are record sales. Also in summer one can notice a spike in the interest in beauty services, including sun-bed sessions, anti-cellulite treatments and diets.

What is the profile of the user of discount coupons in Romania?

It is similar to the wider profile of the user of e-commerce services in Romania. Essentially, the target public has the following demographics: aged between 20 and 40, urban dwelling, highly educated, with constant income and access to the internet both at home and at work.

How has this recently-shaped market developed?

The market of discount websites saw explosive growth last year, but in 2012 this has slowed down. The fragmentation is still rather high, unlike other markets in Europe where the top two-three websites hold 90 percent of the market. In Romania there are approximately 10 discount websites which account for 80 percent of the market, while the other 20 percent is split among another 40-50 smaller players. Besides these, there are another 30-40 websites that show up and fade away constantly. The value of the market was approximately EUR 20 million in 2011. This year it will probably soar by up to 25 percent.

The crisis did not substantially affect this industry. The lack of substantial revenues encouraged the more rational spending of money. In fact, the market of discount coupons is not strongly influenced by macro-economic events, because offers are varied and include services and products from several categories.

Where is present at the moment?

The project was launched in April 2011. Right now, is present in 10 Romanian cities, but there are numerous national offers, especially in the holiday and product ranges. The company has 10 employees. We have recently launched in Great Britain, and we will test the dynamics of this market.

How long does it take for such a business to establish itself?

The time that a website needs to become known to the public depends greatly on the promotion budget that is available. But no matter what the allocated sums are, it needs approximately six months to gain consumers’ trust. Entering the market is very difficult for a newcomer because the offer is already very varied and there are several strong players. Attracting a user from an existing discount site to a new one is highly unlikely, and the pool of new users of discount coupons is becoming limited, with the consolidation of the market. The best way for discount sites to promote themselves is through offers. A very good offer will go viral on social networks and will gain visibility through aggregation websites.

Since competition is fierce, gaining and keeping users is very expensive. Much of the investment goes on marketing budgets to ensure the necessary distribution for a corresponding volume of sales. The fixed costs for such a business are high and so the promotion component needs to be sufficient to cover these and bring profit.

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