LivingSocial is still less than half the size of Groupon in terms of gross revenue, but in September it grew five times as fast largely thanks to one deal: Whole Foods. According to new data from daily deal tracker Yipit, LivingSocial’s gross revenues for deals in North America grew 32 percent in September, compared to 6 percent growth for Groupon. (Both figures are monthly growth versus August, 2011).
Yipit estimates that LivingSocial sold $59.3 million worth of deals in September, a month-over-month increase of $14.6 million. As much as $10 million of that amount was related to a very successful Whole Foods deal which offered $10 off a $20 purchase. Which just goes to show how one popular national deal can really move the needle for the daily deal sites. Groupon saw similar success with a Gap deal last year.
Even if you back out the impact of the Whole Foods deal, LivingSocial still would have shown 10 percent growth during the month. That is still faster than Groupon, but off a smaller base. Groupon sold an estimated $143.4 million worth of deals in North America in the same period. Groupon maintains 54 percent market share of daily deals in North America, versus 22 percent for LivingSocial—a number it has been hovering around since July. But both are doing very well, with a $3.2 billion annual gross revenue run-rate for Groupon and a $1.7 billion run-rate for LivingSocial, based on September’s numbers.
The Daily Deal industry overall grew 12 percent in September to an estimated $266.6 million in gross revenues, a faster pace than the 9 percent growth rate in August. The industry as a whole is at a $3.2 billion annual run-rate, based on September’s numbers (with Groupon representing $1.7 billion and LivingSocial $712 million of that total). Note that these are the gross revenues the deals represent, and not the direct revenues each company gets to keep after it splits the value of each deal with merchants.
Groupon and LivingSocial together make up 76 percent of the daily deals industry,but a dome of the newer, smaller players are growing even faster (again, off a smaller base). In September, No. 3 player TravelZoo grew 37 percent. AmazonLocal grew 177 percent, and Google Offers grew 236 percent. Something tells me that No. 3 spot is going to change fairly soon.