Groupon starts buying Australian rivals

Group buying behemoth Groupon has added Melbourne based coupon site Crowdmass for an undisclosed sum.

Groupon entered the Australian market early this year operating under the brand name StarDeals and has quickly gained ground in an increasingly saturated market. Crowdmass was created by a trio of twenty-something university students- Tim Wu, David Wei and Ying Wang- in a short period of time with little capital.

Crowdmass launched in 2010 with 4000 subscribers after winning a Student Entrepreneurs IdeaPitch competition in 2009.

The entry of Groupon into the competitive local group buying market has brought wide anticipation that the cashed up global player would start consolidation in the sector. The fact that they have snatched up a Melbourne based site would suggest that they are looking at buying companies with localised expertise and relationships rather than acquiring bigger rivals with scale.

Analyst Telsyte has estimated that sales from the Australian group buying sector could reach more than $400 million this year.

In the three months of this year group buying revenue exceeded the entire annual revenue achieved in 2010. Telsyte reported $73 million of revenues to March compared to $63 million for 2010. ®