3-4 years ago Group Buying sites were all the craze here in the Philippines. The juicy discounts for restaurants, entertainment parks, and other fun experiences were too much to resist for a lot of Filipinos. It looks like it was just a fad though as one by one the group buying sites went under and closed. In 2015 Groupon Philippines ceased operations as part of global effort to reduce their costs. In 2016 Ensogo followed suit, shutting down the PH office together with the rest of their operations in Southeast Asia. A few days ago, CashCashPinoy, another pioneer in group buying in the Philippines, closed down as well.
“We’re taking some time out from the spotlight to work on the new and revitalized CashCashPinoy. Stay tuned for our comeback and watch this space for the big reveal. See you soon.” – CCP
This just goes to show how no company, regardless how young or old, is immune to disruption. While there are a variety of factors why these companies folded, the underlying reason is that they weren’t generating enough revenue to sustain their operations. Either the market moved on to the last remaining group buying sites, which to my memory are Deal Grocer and MetroDeal, or they got tired of the “group deals” experience altogether. My take is that it’s a mix of four factors: they were massively outgunned in advertising by e-commerce sites like Lazada, the poor customer experience of group buying made it unsustainable (high churn), vicious competition between the group buying sites, and the travel boom (seat sales ate up the budgets).
This makes you wonder how group buying sites should have evolved in order to not be disrupted. Maybe a clearer differentiation and focus on a niche? Or taking a different direction altogether by becoming a digital loyalty program for merchants? Let us know what you guys think they should have done in the comments section below.
This is part of our Disruption Series. Click below for other posts.