Group Buying Industry In U.S. Estimated To Grow 138 Percent To $2.7 Billion This Year

Posted by ADMIN on Tuesday, March 22, 2011



The group buying industry has sprung out of nowhere over the past two years. A new report (embedded below) by daily deal aggregator Local Offer Network puts the U.S. gross revenues across the industry at $1.1 billion last year, and estimates gross revenues will grow 138 percent to $2.7 billion in 2011.

Groupon alone, according to other sources, is expected to bring in between $3 billion and $4 billion this year, up from $760 million last year, but those numbers are worldwide. If you figure at least half of Groupon’s revenues come from the U.S., you can get a sense of how much it dominates the market—capturing anywhere from about 50 to 75 percent of expected industry revenues this year.


But that still leaves as much as half left over for other group buying sites, such as LivingSocial and Gilt Groupe. And those are just the big dogs. Local Offer Network tracked 90,000 deals across 322 group-buying sites in the U.S. since January, 2010. And that doesn’t even include so-called private sale sites.

In the first quarter of 2011, it tracked 117 new deal sites, which is about double the number of entrants a year ago. The churn rate for these sites is about 25 percent, meaning that is how many fail, are bought, or go dormant.

The number of deals being offered is also accelerating. Last year, there were about 63,000 deals in the U.S. through group buying sites. In the first quarter of 2011, there will be an estimated 40,000. Groupon accounts for less than half of those published deals.

The categories that dominate are Food and Drink (27%), Beauty, Spa & Massage (19%), Fitness & nutrition (7%), Sports & Recreation (7%), and Home Products & Services (5%). The biggest cities for daily deals are Chicago (where Groupon is based), New York City, San Francisco, Boston, and LA.

Local Offer Network gets all of this data in a variety of ways, including business relationships with about half of the group buying sites, data feeds, APIs and web crawlers.

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