The Samsung Galaxy S2 16GB with an MRP of Rs.35,000/-

And a few days back, to welcome the festive season (Diwali Bumper Dhamaka as they call it), Koovs brought back the Samsung Galaxy S2 deal. But, there was something very peculiar…

Koovs' Offer on the Galaxy S2 with conflicting MRPs

The deal put up in August quoted an MRP of Rs. 35,000 while the current one above cites Rs. 32,900 – that’s a difference of three thousand bucks on the same product. Weird!

The MRP of the 16GB Samsung Galaxy S2 in India has never changed since launch and has always been only Rs. 32,890 and not Rs. 35,000 as quoted in the August deal. Thus, the discount percentage is 12% and not 17% as mentioned in the old deal. Even in the Rip-off cases where the MRP was inflated, it was at least based on a price quoted by some online reseller (like eBay). But, this price (Rs. 35,000) quoted by Koovs seems to be completely arbitrary. I’ve not been able to find this price cited anywhere on the web. The only other price quoted is Rs. 39,900/- by indiaplaza prior to S2′s launch in India, as it was sourced from the UK. So, why not pick that price and offer a 27% discount instead? Why randomly fix the price in the first place? And on what basis? Then suddenly, Koovs corrects this error when they run a deal on the same product 2 months later. I’m stumped!

The permalinks to the old deal and the current one.

Related stories:

1. Interview with Koovs co-founder – Rajesh Kamra – Part I
2. Rip-off #2 – Gone in 60
3. Rip-off #1 – Bad Apples!

While it’s true that many deal sites are showing a downwards trend, some of the top ones including SnapDeal and DealsAndYou have shown a drastic drop. From being one of the Top 20 sites in India, SnapDeal’s rank is now languishing at 50. This trend is not true of all deal sites – some of them have actually improved their traffic like Koovs (but this is mainly due to recent infusion of capital).

Graphs showing SnapDeal's downward trend

There might be a boredom combined with exhaustion setting in among deal hunting online users. The sheer amount of spam from subscribing to various deal sites is burdening users. Could it be that the popularity of deal aggregators have affected their traffic. But, more importantly has it affected the number of transactions or sales volumes?

Or perhaps, it’s because of market saturation. Here’s an example. Assume that there about a 1,000 people who want to hit the spa this week or are vaguely interested. There are about 15 deal sites which are offering multiple deals from about 50 spas and salons across the city. These deals will get snapped up based on the proximity of the place and availability of a suitable and usually inconvenient time since the peak hours are reserved for walk-ins or ‘regulars’ who pay the full price for the services. See the problem here. There’s an equilibrium that comes into play in this supply-demand chain. There are only that many deal subscribers who want a particular type of deal and a fixed number of merchants to offer them. And there are way too many deal sites who are all scrambling for limited number of customers.

Most of the daily deal and group buying sites in India are clones. Incidentally, many Indian portals try and replicate a successful and proven business model in the US. Sure, credit must be given that the Indian daily deal start-ups have kept many major players at bay and made them play second fiddle. But, the pace with which innovation is happening on the web is just stupefying. That applies in the Indian context as well. None of these companies are actually innovating on the business model (Groffr might be an exception). Adding more subscribers and new merchants alone wont suffice to stay alive in this cut throat market. Complacency may not set in actively. But, lack of innovation will do exactly that.

Time and time again, we have seen new start-ups taking on the biggies and out smarting them. The time is ripe for a new entrant which could give these deal sites a run for their money. 

In many cases, businesses (including online portals) explicitly ask for the user’s permission to notify them about their promotions and events. In such cases, the promotional messages is not considered as spam, as the consumer is actively seeking such information.  For e.g., intimation of a sale, or when the placed order has been dispatched, etc. Even so, there are a large number of vendors who do not provide this option or worse, ignore it.

Nowadays, daily deal & group buying sites seem to have managed to circumvent the laws. Here’s how…

SnapDeal - Spam Subscription

Soldinsixty - Spam Subscription

Major deal sites including SnapDeal, Soldinsixty, TimesDeal and Rediff’s Dealho Jaye allow anyone to submit a mobile number on their site for SMS subscription of their daily deals and offers. There is no validation done for mobile numbers. The same is true for e-mail addresses as well, but authentication is done in certain instances. Thus, it becomes so much simpler for someone (or the e-commerce site itself) to key-in random numbers on the site.

Why would they do this?

Well, isn’t it possible for a start-up, who out of despair want to get the word out and attract more users to their site? Or perhaps in order to hit the numbers for the quarter and please the investors? Merchants could have vested interests as well – in order to make sure that the SMS update from the deal site running their offer, reaches as many people as possible. There are simple scripts which will create a list of possible mobile phone numbers specific to a city based on the mobile operators code (for e.g., 98860 – Vodafone Bangalore; 98450 – Airtel Bangalore, etc).

TimesDeal - Spam Subscription

DealsAndYou is one of the very few daily deal sites which actually authenticates the mobile numbers submitted on their site.

For those who became victims of such conniving methods, there is a way to get rid of the mobile spam. Most of the top sites provide an SMS Unsubscription link. But, the question remains as to why established players resort to such methods (whether intentional or not), when there are legal, cleaner means to get new subscribers.

It is to be noted that TRAI in a recent announcement earlier this month, said that

Access Providers have to make relevant provisions in their network before allocation of resources to telemarketers using ‘140’ numbering series from fixed line network. Accordingly, relevant clauses of regulations has been amended and the regulations are being implemented from 27th September, 2011.

The above amendment is applicable to any and all “Unsolicited Commercial Communications”, except SMSs which are in public interest are exempt from above rule. But, will the above mentioned instances also come under the cover of pesky calls / SMS where users have apparently ’opted’ for such communication without verification?

When will people get relief from SMS spam?

[Part I of the interview]

[Part II of the interview]

In the concluding part of this exclusive interview, Rajesh discusses the reason behind diving into the products segment. He also talks about exploring other verticals and how the products space is evolving before giving his final thoughts on the Indian e-commerce space.

[Transcript]

Praveen (PR): Koovs offers more discounted products – particularly electronics items – than deals right now. Do you consider this to be a pivot or a natural progression since Koovs started out as a daily deal / group buying site and now is offering branded products – like in other online shopping portals?
Rajesh Kamra (RK): Well, it was a natural progression, as we were receiving a lot of requests from customers asking for deals on specific products. This would continue as there is high demand including for ones that are not being offered at present. And it’s not specific to electronics alone. It could be lifestyle, services, travel, ticketing, events, etc. We try to provide what our customers ask of us. We want to that “be happy” kind of place where, for any user who comes to our site, there’s something for each one of them.

PR: You mentioned travel, which is an extremely lucrative vertical that many players are trying to cash in on, given the nature of the deals (high ticket value). SoSasta (Groupon India) and SnapDeal have their own exclusive travel deals section on their homepages and a new entrant – Vamoose - concentrates exclusively on travel deals. So, will Koovs also jump into travel space in a big way with a dedicated section on the site?

RK: In terms of the categories, we have already run many deals in the travel space. We’d tied up with local resorts in and around major metros. We have had some travel sites put up their ticketing offers on Koovs, airline tickets and things like that. So, we have already done that and into that space. We will continue to offer travel getways and resort offers. But, there may not be a particular section for it on the site though.

PR: Do you believe that there are other verticals apart from the ones deal sites have already explored, that has high potential?
RK: Definitely. There are a lot of merchants who contact us everyday who want to put up offers on our site. We are not able to scale because we’ve not entered that vertical as of now. So, there’s always scope for the other verticals which may be education, insurance or others.
PR: So, are deals from the education and insurance sectors something that we could look forward to in future? Because those are two verticals that deal sites have not yet entered (except for Groffr which has started offering Group Home loans)
RK: (smiles) I cannot confirm that. But yes, we are always open to discussion and we’re still in talks at the moment.

PR: In the US, there are 500+ deal sites. China has got another 500 or so. India has 50 (as per our blog) – there could be a few more. Is this too less a number or is it already overcrowded? Do you believe there’ll be consolidation in this space? Acquisitions, mergers and partnerships being forged in the future? What are your thoughts?
RK: First of all, I do not consider Koovs as a ‘deal site’. We are a company who market & sell products and services. There’s a very fine line between a deal site and an e-commerce site per se. But, we do not consider ourselves to be one (deal site). Secondly, the Indian market is quite huge and the market penetration has improved drastically in the last couple of years and with 3G becoming popular and more people accessing the internet through their mobiles phones, things are going to be much better with more opportunities out there. Just look at the volume of transactions done each day on the IRCTC site. It’s phenomenal and from parts of India which are not only tier-I cities. The market size is very big at the moment and it is growing.

Will there be consolidation? Yes. But then again, if you look at the number of OTAs (online travel agencies) operating currently, there are loads of them. But many are doing pretty well and getting traction. There are some 3 or 4 players at the top but still others are doing well too in the geos or segments they cater to. Similarly, deal sites could to cater to a particular category or a vertical or a region or provide a local language based service. So, there would be demarcation coming in and businesses will find their niche areas and would stick to it. Even if somebody wants to enter this space today, it is still very much possible. They have to identify their area and if they do it right, while keeping their heads on their shoulders… I mean it shouldn’t be like I’m going to become a multi-millionaire or start a multi-billion dollar company! But, if you do it right then there’s definitely plenty of scope as the market is just really big.

PR: There are major international players entering the Indian deal space. We already have Groupon India (SoSasta). eBay has also launched local deals. LivingSocial is planning to enter India soon. We also have some established Indian giants such as Times, Rediff, MouthShut who have launched their own deal sites. They all have massive funds and a huge customer base. Not to mention marketing muscle too. How is this going to change the dynamics of the daily deals space?
RK: To begin with, I did not that there were 50-odd deal sites in India until you’d told me. Yes, these are big names actually. Rediff, Times Of India – they have an offline presence as well. I still believe there’s a market space. What is the of quality of the deals that you are offering and what are the margins you’re getting off it. What is the traction that you’re able to generate through your website for the merchant. A lot of these things matter and so there is still enough space for players.

PR: With so many new entrants, is the competition going to make things more difficult? We’ve already seen the same deal being run on multiple deal sites, many a time simultaneously. What are your thoughts on this?
RK: As I said earlier, we’re not just in the deals space. I see Koovs as a place where people can purchase something or try out something new. So, we were the first ones to go out and bring the adventure sports deal, we were the first ones to pivot into the products space, we were the first ones to introduce bulk ticketing for events. So, obviously we will keep finding a space which will keep young India hooked up. So whoever finds an area and is able to build a rapport with the merchant and engage the customer will do great! Now you have other sites who followed us and are offering deals on adventure sports and products. So, the question is – anyone can enter, but can you lead in that space? That’s the real question and to us it’s whether we can provide that and conquer that space.

[End of Interview]

[Part I of the interview]

Here’s the second in the three-part interview, where Rajesh talks about the BenefitsPLUS acquisition, the synergies created and how it’ll affect the future roadmap for Koovs.

Praveen (PR): How many merchants/vendors has Koovs tied up with?
Rajesh Kamra (RK): It’s a high 4 digit number across metros and including the tie-ups with vendors in the product space
PR: And the number of employees?
RK: As of today, we have 35 employees. We are on an expansion spree right now. So, by the end of this calender year we expect the number to be 100+.

PR: Though Koovs is an e-commerce company, it is also a marketing channel for merchants. What was Koovs’ marketing/advertising strategy and how much was spent on it?

RK: Yes, Koovs being an online maketing channel, it was necessary for us to know inside out of marketing, specifically digital marketing. Unlike other players, ours was very organic growth. We could have spent money on acquiring customers through online and offline ads or such branding activities. But we didn’t do that. So the entire growth that we had was very organic and word of mouth. We made use of social networking sites to put up the deals and most of our customer base was acquired from there through the viral effect that was created there. So, we never spent any money on marketing.

PR: BenefitsPLUS is a B2E player offering rewards & recognition programmes and are into the discounted deals section too – but again, targetted only at corporates.
RK: Exactly.

PR: BenefitsPLUS recently acquired a majority stake in Koovs and are the holding company. How is this recent development going to shape the future of Koovs? And is Koovs going to look at only the consumer space or can we expect Koovs to expand into the enterprise space as well.
RK: We were very fortunate to have BenefitsPLUS partnering with us.
It was a very good synergy as we had the offers with us and they had the (corporate) customer base with them. So, we thought that this was the right kind of mix that would take both companies forward. Koovs as a brand will continue to focus on the consumer sector while BenefitsPLUS would take care of the enterprise sector. The synergy will be in terms of the deals, offers, employee benefits and merchant tie-ups. So, we might not be directly getting into the mail boxes of employees but we’ll definitely be powering the offers shown to them

PR: One of the reasons for the initial growth of SnapDeal.com could be attributed to the fact that they already had a network of merchants tied up with them through the parent company Jasper Infotech. They were into the couponing business at that time. So, when they launched snapdeal.com, they already had the muscle to get into the deals space much more easily. The entry barrier was less and the ability to scale up was so much easier. Would you say that due to the recent acquisition by BenefitsPLUS, Koovs is in a similar position today due to the synergies created?

RK: Well, yes. SnapDeal definitely picked up after they acquired Grabbon. Because that’s what really provided them the platform. We are in a much better position than Jasper was at that point in time. Because we ourselves have a very high aggregation of merchants that we have acquired over the last 18 months in various metros. And Koovs is a recognized brand. So, the kind of scaling we are looking at with BenefitsPLUS is even bigger. They’ve been in the market for an even longer time and the kind of corporate tie-ups that they have is much bigger.

PR: What is the roadmap for koovs for the next 2-3 years?
RK: We are doing really well in the metros and in the e-commerce products space too. We always believed that it’s the offers we put up that really matter. It’s what attracts our customers. So, we’ll continue to do that and we plan to expand to more cities. We also plan to have a wider range in terms of the categories and product catalogues on offer. And we also plan to provide our customers other platforms to buy deals

PR: What other platforms is Koovs looking at?
RK: In terms of convenience, we’re coming up with various channels for customers to buy the deals from us. We do not want to restrict ourselves to dot com alone. We are planning to launch a mobile app, a ‘Call in and purchase’ service and a couple more are in the pipeline. But, they are still in the drawing board though.
PR: Are we going to see a bigger online presence with more marketing spend? The facebook fanbase has more than doubled since the BenefitsPLUS investment.

RK: Yes. Very soon, we plan to spend on marketing. And as I said, so far we’ve had a very organic growth and our customers have responded well. People can definitely see a more prominent presence for Koovs online.

[End of Part II]

[Click here to read Part I of the interview]

[Click here to read Part 3 of the interview]

Here’s the transcript of the interview:

Koovs' Co-founder Rajesh Kamra

Praveen (PR): Tell us about the story behind Koovs. How did it all start?
Rajesh Kamra (RK): We were a team of 3 IIT-ians along with Manish Tiwari & Amit Shukla. I was working in strategic consulting with HSBC while Manish and Amit were with e-commerce companies. One day, we came across this concept of localized marketing. We realized that many of the local vendors do not have access to online marketing or didn’t understand the space too well but wanted to reach out to local customers. We thought there was an opportunity here and something could be done towards that end.

So, we founded Koovs in December 2009 and tried to create relationships with vendors and merchants in various lifestyle businesses like restaurants, spas, adventure sports, events – which a typical online, social crowd would be interested in. The merchants were quite interested and enticed by the idea of reaching out to customers. The issue was in giving out those hefty discounts. So initially, there were some hiccups in making them understand that it was not a sales cut but a marketing spend, which isn’t paid upfront and that it completely depends on the sales generated from running that deal. Slowly over time, there were a few offers coming in from owners of restaurants, health centres and spas who were interested in trying it out. We started with that and went live on 23rd December, 2009.

But, it wasn’t until that paragliding deal when things really took off for us. Hundreds bought that deal. And then the network effects took over. We’d merchants who were ready to offer 80-90% discount after that. It was a turning point for us.

PR: During that period, December 2009, there were very few players in the Indian deals space. You guys were there even before SnapDeal and Deals&You…

RK: To be honest, I didn’t know about the other deal sites at that point in time. We went about meeting merchants and during one of those visits, we found out that one of them had been approached by other parties with a similar pitch. So that’s how we actually found out! We got to know about MyDala and then Grabbon which got sold out a few months later to…
PR: SnapDeal.
RK: to SnapDeal. Yes, exactly. And then there were several other players coming in and the space really heated up. But, we had the conviction that this would work as it made business sense and we never looked back.

PR: Coming back to the same question. In December 2009, as an early entrant in this market, how did the early mover advantage play out? Or was it actually that much more difficult to get these deals since this concept itself was quite new and deals space wasn’t popular or mature enough as it is today?

RK: Well, there were two major issues or concerns when we started. First, with the merchants – Will they buy this kind of marketing platform? And the second – Will the consumers buy it? The point is OTAs (Online Travel Agencies) showed that people would buy online if there was value being created with the convenience factor playing a huge role. The best way to find out was to go and talk to the merchants directly. We did that and simultaneously reached out to our friends, posted on various blogs, social media sources, corporate newsletters and places like that. And there was traction as the customers were happy since they were getting 50-90% discount on places they normally visit, or would like to visit. So, the risk for them to experiment was lesser while at the same time, the merchants were getting new customers. It picked up from there. Thankfully, the merchants warmed up to the idea and realized the value in it. And that is one reason why we also have many repeat businesses from merchants.

PR: Could you give us some stats. How many cities is Koovs active in? How many users have signed up?
RK: We’re one the top 700 sites in India now (Alexa ranks them at #686). We’ve over 5-lakh subscribers with over 20% of them having transacted with us. We’re a pan-India player but the localized offers are concentrated in the metros as of now. We are yet to capture the tier-2 cities and we are planning to get there shortly as we are expanding.

PR: Which is your most popular category? In terms of the number of deals sold and the overall sales volume generated.
RK: Food & dining and health & beauty categories are quite popular. Travel space and adventure sports are also doing really well. Koovs is also into products and that’s a big hit.

PR: I think Koovs were the first to pivot into product space right?

RK: That’s right. It was based on the feedback we got. There were a lot of requests coming in from our existing customers that they would also like to see deals on mobiles, pen drives, hard disks and the like. So, we went ahead and introduced it.

–End of Part I–

[Click here for Part 2 of the interview]

[Click here for Part 3 of the interview]

But how about this… Two deal sites running the exact same set of active deals. That’s right – identical deals! Everything right from the title to the price & discount is unchanged.  Here’s a screenshot displaying the deals from the two sites – DealYantra and Dealivore (taken a  few days back).

Dealyantra and Dealivore run the same set of active deals

When we shot an e-mail asking if the IndyaRocks owned DealYantra bought out the Hyderabad based daily deal startup Dealivore, we received the following response from Suresh (of Dealivore).

“Its a partnership. Thanks“

But isn’t DealYantra getting the short end of the stick? Dealivore.com has got way better traffic and a massive facebook fanbase (300k+)? Serving the same content doesn’t make much sense. Such an arrangement would only cannibalize into DealYantra’s revenue.

On the other hand if DealYantra had bought out Dealivore, it would have made business sense. In fact,  it would have been a master stroke since it would given them a firm footing in the highly competitive deal space. DealYantra could have then pivoted and found a more niche domain to focus on. Also, if they had two brands, it would have given them the opportunity to differentiate one product offering and focus on a new target segment. Perhaps concentrating on a dedicated vertical or catering to a more premium luxury segment would have given them a wider audience. IndyaRocks could take a leaf out of Fashion & You who had acquired daily deal site wanamo.com (rebranded as Deals And You). And it’s been working quite well for them…

Here’s our tweet to Dealivore seeking clarification. As mentioned in our review on DealYantra, they don’t have a social media presence!

Do you believe that this partnership makes sense? What are your thoughts?

There are 2 international players already – Groupon and eBay.  And a third is making its way here – the Amazon.com backed Living Social. In addition to this, several Indian online portals have also jumped in – Rediff’s DealHo Jaye, MouthShut’s Dealface, IndyaRocks.com owned DealYantra and TimesDeal.  These daily deal sites have become quite ubiquitous and as per one account “…has the power to affect GDP and help small businesses” – See tweet. There’s also an overwhelming need for a quality deal aggregator in the Indian market. We already have over 20 deal aggregators – but none of them are doing a great job at it. Who knows, perhaps another international player will arrive in this space too (‘Yipit’ or the Google acquired ‘The Dealmap’?). And when they do, they might just become as popular or even overtake the top deal sites!

Anyways, here’s the list!

1. SnapDeal – Review link | Site link
2. Deals And You – Review link | Site link
3. SoSasta (Groupon India) – Review link | Site link
4. Crazeal (Groupon India) - Site link
5. Taggle – Review link | Site link
6. Koovs – Review link | Site link
7. MyDala – Review link | Site link
8. Groffr – Review link | Site link
9. TimesDeal – Review link | Site link
10. Groupon.in – Review link | Site link
11. Rediff’s DealHo Jaye – Review link | Site link
12. DealYantra – Review link | Site link
13. Dealface – Review link | Site link
14. Dealivore – Review link | Site link
15. Buzz in Town – Review link | Site link
16. Bindaas Bargain – Review link | Site link
17. Living Social (India) – Review link | Site link
18. Sold in Sixty – Review link | Site link
19. eBay (local deals) – Review link | Site link
20. Vamoose – Review link | Site link
21. MakeMyTrip Deals – Site link
22. Aaj ki Item – Review link | Site link
23. Scoopstr – Review link | Site link
24. Whack.in – Review link | Site link
25. AajKaCatch – Review link | Site link
26. DealADay – Site link
27. Deal Magic – Review link | Site link
28. CityOffers – Review link | Site link
29. Foodome – Review link | Site link
30. Lootmore – Review link | Site link
31. groopoffers – Review link | Site link
32. RobberyOnline – Review link | Site link
33. Mastsale – Review link | Site link
34. Gain Daily – Site link
35. DealDrums – Site link
36. Thekha.com – Site link
37. MotaDeals – Site link
38. HungamaDeals – Review link | Site link
39. FandooDeals – Review link | Site link
40. GroupBachat – Review link | Site link
41. Urban Gain – Review link | Site link
42. WebKolkataDeals – Review link | Site link
43. Travelzoo (India) – Review link | Site link
44. Voucherwow – Review link | Site link
45. Coupon2buy – Review link | Site link
46. Grako.in – Review link | Site link
47. DealOnPune – Review link | Site link
48. Dealmela.in – Review link | Site link
49. Coupons On Mobile – Review link | Site link
50. Huddle N Deal – Site link
51. MobDeals.in – Site link
52. GroupBookings.in – Site link
53. DealFlats.com – Site link
54. StudentTemple.com – Site link
55. DealBeal.com – Site link
56. Dealspick.com – Site link
57. Masaladeal.com – Site link
58. Masthi Deals – Review link | Site link

This list is continually updated. Do let us know if there were any that was missed!