LivingSocial: The crisis of another group buying website

Group buying company Http://www.aliyun.com/zixun/aggregation/33918.html ">livingsocial has become increasingly disruptive to society." Groupon's rival, in Thursday, said it would lay off 400 people, about 9% of its total workforce, probably because of a fall in demand for its services. The company's revenue in the third quarter was $124 million trillion, and the loss reached 565 million dollars.

LivingSocial is not the only one facing pressure in this burgeoning industry. Groupon's board is reportedly considering whether to dismiss CEO Mason Andrew Mason, who admitted this week that his performance was really worth hammering. The company's directors seem to have decided to let him stay, at least for the time being.

In fact, the new industry has only been around for a few years and the entire online coupon industry is struggling, and top companies are still trying to learn how to grow and profit quickly to meet their investors. The question now is not how to unite and consolidate to keep going, but how many companies can stay. According to the Trade Publishers group Buy Media, in the second half of 2011, about 800 group buying companies closed.

As a privately held company, LivingSocial does not disclose its financial information. But the company's investors are known to share its success. Last year, its private equity fund increased by $176 million trillion to $400 million trillion, which raised the value of LivingSocial from $5 billion to $6 billion trillion.

Last quarter, LivingSocial's income was $124 million trillion, down 10% from a year earlier. Obviously, whether or not the money is rising, or not enough in this bad is the time to continue. And the bad timing has spread. One of its biggest investors, Amazon.com, is to get 169 million dollars back under a 2010 treaty to invest $175 million in LivingSocial.

The fundamental problem with group buying is that the identity of the company reflects its transient and volatile nature. After all, these companies do offer discounts for certain goods or services that do not simply offer simple advertising and special offers. In marketing, no type of discount can last.

This is why companies must constantly test new ways to attract the attention of buyers. But as the novelty of the group buying company fades away, the reason why group buying can exist is also a problem. Companies like LivingSocial and Groupon not only try to sell their services, they also have a very good idea of service that can evolve in a new environment. Regardless of their size, such companies can only be as good as their last trade.