Times Internet’s TimesDeal has launched the new version of the service, making the deals free for consumers (i.e. no upfront payment).
What’s the big deal? How are they going to track conversion? Is conversion even important to TimesDeal or are they creating a deal destination site and will monetize later?
Here is a candid QnA with Satyan Gajwani, CEO of Times Internet.
Pi: What’s the business model behind ‘free’?
Satyan Gajwani: Honestly, we’re not really sure yet. We will definitely lose more money in the short run, since we’re giving up our existing revenue stream of 20-40% of the deal value upfront. But we’ve seen really strong response whenever users have been able to get deals free, and we think that if we can create a destination that harnesses that demand, we’ll figure out some business models.
We think we’re doing something interesting, and if we’re able to collect that demand, there are a lot of different models we can play with to monetize the audience base.
Pi: Will you track conversions?
Satyan Gajwani: We always did track conversions, both from visiting the site to buying a deal, and even from buying a deal to claiming it. Our experience with prior free deals, which we tried on Valentine’s Day, was that merchants saw significantly more response when deals were free. We expect that to happen here overall.
Pi: The deal business is almost over in India and importantly, there were a few reports of merchants not happy with the way deals were positioned (cheap vs. inexpensive). Why focus on this segment now? What’s the big deal?
Satyan Gajwani: I don’t think the deals business is over; there has been and continues to be a demand, especially in India, for consumers to get value. That’s a very powerful user proposition. The challenge has been on a revenue model that made sense for consumers, deal sites, and merchants. We think our new model works well because:
– For consumers: We don’t need to charge users upfront, which gives our users more comfort about what they’re getting into. Users won’t have to worry about committing to something they’ve never had before, while still knowing that these are curated deals that we chase down which are real and will always be honoured.
– For merchants: Because of the lack of payment, consumers are more willing to try something new, and that means attracting more NEW audiences to our merchants. And we always work with merchants to make sure that what we do contributes to their business and their image.
– For us: We think if we can help create a meaningful interaction between consumers and merchants, and create new discoveries between them, we’ll figure out a value proposition at some point.