Is There a Business Model in Deal Aggregation Space?

We earlier covered the list of group buying (a.k.a. Groupon Clones) in India and given that there are so many players in this industry, it’s quite natural to look at aggregation as the next step.

That is, a services that aggregates deals across these deal websites and helps users identify the deals, filtered by category/city etc.

First, the Positives

As a consumer, it’s just not possible to track each and every deal site on a daily basis. There are too many of them and while many a times there are overlaps, it still is a pain to go through so many deal sites. Hence the need for deal aggregators.

Group Bargain Deals
Special Group Bargain Deal 😉

That is, deal aggregators mitigates the pain of subscribing to all these deal sites and also helps you find the best deals (theoretically speaking). Most importantly, aggregation model works only when

  • There is enough chaos (i.e too many creators, targeting various categories).
  • There is enough mass (of consumers) interested in sifting through the chaos and find something that suits them.

And given the rate at which deal sites are mushrooming in India, the time is NOW to build your deal aggregator.

What Does it Take to Crack This?

What does it take to crack the deal aggregator model? If you look at some of the successful aggregators (Kayak specifically), one of the attributes that worked in their favor was timing. Back in India, (Rajesh Jain’s venture) was truly one of the first aggregators (of news) and was the homepage for a lot of us.

With time, personalized/RSS feed readers have replaced that model (of samachar), but wherever there is a problem of plenty, there is an opportunity to aggregate those hatful of creators.

What Are Indian Deal Aggregators up to?

While we publish the entire list of deal aggregators very shortly (do get in touch with us*), looking at most of the deal sites, here is my observation.

Mostly fly-by-night operators.
There is no seriousness to this model right now, and is more of a ‘let’s see how this goes’ model. Can you quit your day job to take this suddenly-developed passion to next level?

– Most of them work on WordPress.
Nothing wrong with that (after all, the grand daddy, i.e Groupon started as a WordPress blog), just that the lower entry barrier has enabled anybody to set up an aggregator. All you need to do is take the RSS feed of deal sites and push the same on your site. And in cases when feeds aren’t available (watch out guys, Feeds are the simplest distribution mechanism you can ever build), simply scrape the site.

Lacks user base.
Ultimately, it’s all about the user base. Most of deal sites have more than 20K-30K ‘Facebook fans’ and email subscribers, so a new player has to match the same. The deal aggregator should reach out to a LOT of people- and that’s where newspapers and big media sites will make the cut (Rediff?).

No serious engagement model.
An aggregator has to have an engagement model (driven by site UX/distribution etc)– that’s the value they add to the deal sites and importantly, the bargaining power they bring to the table. Right now, most of the deal aggregators are doing what free WordPress plugins allow them to – i.e. rate a deal, like/dislike a deal, share with friends etc.

– Sales anybody?
Your startups/venture’s ultimate moment of truth is when you go out in the market and sell stuff. Sitting in your comfort zone of home won’t really make the cut (read the Flipkart story).

Most of the deal aggregators, like I said earlier believe that affiliate model will fetch them a huge amount of money (and someday they will jump the ship and startup on their own). Let me tell you a bad news here – this whole story of ‘we build a deal model online’ will not work at all. If you are a serious player, you have to get your hands dirty. You have to sell and there is no escape from this.

To cut the long story short, if 2010 witnessed the flood of deal sites in India, 2011 will see the same with deal aggregation sites.  Only time will tell if these ‘part time’ hacks transition into a serious business.

What’s your opinion? What do you think will make the ideal feature set for a deal aggregator?

Back to the title: Is There a Business Model in Deal Aggregation Space?

* If you are a deal aggregator site, send us an email (ashish/naman @sitename) with a one liner description/USP of your site.

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