Groupon Japan And Recruit Pompare Show Strong Recovery After The Quake

Japanese flash coupon vertical search Coupon-JP has just released an April version of sales estimation of major social coupon services [J, pdf] after March report skipped by the quake.

Groupon Japan, which started by US Groupon purchasing a local clone last summer, has been leading the market but got damaged by terrible osechigate at the beginning of 2011. Coupon-JP’s January and February statistics showed its stagnation involving many other clones, and an ads-aggressive follower Ponpare’s catch-up.

By seeing it, there were people (including I) saying that Groupon model may not work for Japan like in US. I also heard some people in industry told that Recruit, who is said to run Ponpare with much lower commission than Groupon Japan, does not really want to succeed on Pompare, but tries to devastate the flash coupon market itself.

However, the April report gives good uptrends of Groupon Japan, 172% of February sales. Recruit Ponpare also recorded 190%. Their day-to-day sales chart gives you an idea how the big disaster affected first, then both gained a lot more sales even before that.

Nationwide jishuku(restraint and thrift) mentality arose after the disasters refrains people from spending money on anything expensive. That should work positively on coupon sales.

About other players, Ikkyu Coupon passed Toku and Sharee but none of their sales threaten the top 2 by numbers.

Study: Post-Quake Sales Of Japanese Group-Buying Sites Down 36%

What’s the overall size of Japan’s market for online group-buying sites? Tokyo-based Luxa (which runs one of these sites/more info here) regularly issues reports on the domestic industry as a whole.

And according to their latest study, the quake and tsunami that hit Japan on March 11 had a rather large negative effect on the sales numbers of the Japan’s group buying sites: total sales just reached 9.7 billion yen (US$117 million) in March 2011, based on 220 sites examined.

This chart from Luxa shows that numbers were actually going up slightly from January to February, following the sharp decline the industry saw right after Osechi gate in December:

Via Venture Now [JP]

Groupon Japan Being Chased Up By Recruit’s Pompare – Maybe Osechigate Affected

Daily deal coupon search service Coupon.jp released [J] their February research on Japanese daily deal coupon service sales by calculating each site’s coupon prices and number of sold tickets.

On their chart, No.2 Pompare, run by Recruit, shows 30% growth to be about 70% of No.1 Groupon Japan’s sales.

It was about half in January stats by the same coupon.jp.

Osechi trouble damaged most players’ business, but Pompare and some others are quickly recovering from it. They may get some potential customers from Groupon Japan because of media bash.

Both companies have been said to spending a lot on promotion. Many of targeting ads on Japanese websites are occupied by either of them, which shows hard competition is happening between them.

Many bloggers wrote about an image of a lady who showed on the Pompare’s banner ad [J], which must be one of the most seen and remembered banner on Japanese web recently.

Some tried to identify who this girl is, but it turned out [J] to be a image from a stock photo service, who answered that even they could not find her name.

Groupon Japan’s Osechigate Still Smoldering

The poor traditional holiday food (osechi) delivery happened on New Year’s day around Groupon Japan, followed by media bash then Groupon world CEO’s sincere but delayed video apology 17 days later, must affected somewhat on their Japanese penetration and pitching daily deal business itself.

Even though a month passed, media rushing on this issue has not ceased. On Friday 3rd, Japanese economic newspaper Nikkei’s online released 6 pages, intensively researched long article that explains from what this coupon service is, to osechi and several other problems happening [J]. I have never seen other news which dug down such deep on this topic.

Nikkei pointed out that too-pushy sales caused the troubles, and it is needed to check if only coupon services get fruit against shops and consumers. They also covered a shop owner who ought to sell and cancel thousands of coupons by following Groupon sales’ insufficient explanation, needed to sign on an agreement that he would never tell about it, if he wants to cancel.

Then, Saturday night, national public TV NHK broadcasted 24 minutes documentary, “Kyukakudai! Gekiyasu Ku-pon Saito”(Booming! Heavily-discounted coupon sites) in their weekly program Tsuiseki(Chasing) A to Z.

The program began with explaining what coupon service is as well. NHK interviews some of service providers and let them talk how much it reduces marketing cost with getting social buzz, however, the tone of the program were negative overall, at least web users felt so (from Tweets and 2-channel board
s).

NHK aired the closed Bird Cafe, the osechi vendor. Then they introduced shop-side anecdotes. A hamburger shop in Nagoya, who claims to be forced by sales persons to issue 2,622 tickets, with the price below the cost and they can only serve 30 set per day. The shop served 700 in 2 month but resulted in cancelling the rest. Another Izakaya (Japanese food bar) shopkeeper told that a sales person posted photos of dish which were not theirs (taken from somewhere).

Nikkei and NHK are the ones of the most trusted news sources in Japan, especially by mid-to-old generations. Those people might know the coupon business and its bad reputations at the same time by these.

On the web, someone made a half sized figure of the Bird Cafe’s poor osechi set,

Share photos on twitter with Twitpic

and the osechi T-shirt is sold, too.

Groupon CEO Andrew Mason Apologizes To Japanese Customers For Osechi Trouble

A half month after the ‘osechi'(traditional Japanese New Year food) trouble, Groupon founder and CEO Andrew Mason appeared on video on the Groupon Japan official blog to offer his apologies to Japanese Groupon users.

“We learn from this mistake, and don’t repeat the same mistake twice.”

I think most Japanese customers will be satisfied with this, and perhaps even like Groupon more than before the incident. Mason’s apology is similar to the apologies given by Japanese executives from time to time in the past, though Mr. Mason didn’t do a deep bow. Isn’t this style a bit strange for an American company?

(proofread by Adam Walls)

[Update: follow-up articles]

Asiajin » Groupon Slows Down After New Year Osechi Incident In Japan

Asiajin » Groupon Japan’s Osechigate Still Smoldering