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Going Local or Global: The Case of
This case was prepared by Dr.
Seongmin Jeon of Gachon Uni Online Daily Deal Company
versity and Dr. Byungjoon
Yoo of Seoul National Uni TicketMonster
Asian Case Res. J. 2014.18:401-428. Downloaded from www.worldscientific.com
ineffective handling of an It was late in the evening in June 2011 when Daniel Shin,
administrative or business sit CEO of Korean online daily deal company TicketMonster,
uation.
gathered his management team at his house. The large house
Please address all correspond belongs to the grandmother of Shin and is used as an accom-
ence to Assistant Professor
Seongmin Jeon, Global Busi modation for the companys founders and a workplace for
ness Track, Business School, them at the same time. When all the team have seated in
Gachon University, Korea. E-
mail: smjeon@gachon.ac.kr the living room, Shin began to explain the strategic options
that the company have at the moment. One option is to take
3rd round investment from venture capitals and the other is
to transfer the ownership to LivingSocial, the No. 2 online
deal site in the United States after Groupon. Since its incep-
tion in May 2010, TicketMonster, South Koreas largest daily
deal site, had offered daily and instant deals, travel packages,
and discounts on events to more than two million members
in Korea and Malaysia. The companys rapid development in
South Korea from $18,000 in monthly revenue at the start
of May 2010 to more than $20 million in 2011 translates
into a spot among the worlds top five online daily deal firms.
During the meeting, Shin and his team weighed
the pros and cons of continuing the companys expansion
into other Asian markets in addition to Malaysia, which
TicketMonster had previously entered through the acquisi-
tion of Everyday.com.my. Another option for the company
was being acquired as part of LivingSocials global strategy
of snatching upmarket leaders in target countries in order to
compete more effectively with local and global competitors,
which in Koreas case included Groupon whose entry into the
BACKGROUND
and locate said goods and services and then purchase them.
The social networks that spread this advice were found
by MONASH UNIVERSITY on 05/18/15. For personal use only.
Financial Partners
the online daily deal action just after its $6 billion proposal
to acquire Groupon was rejected, while Facebook also began
by MONASH UNIVERSITY on 05/18/15. For personal use only.
Success Factors
$176 million.
A unique aspect of the Korean online daily deal
market is that roughly half of the South Korean population
is focused in Seoul and the surrounding Gyeonggi Province.
Consequently, most of the newly-opened online daily deal
sites provide discount deals within Seoul, thus resulting in
severe competition that has led to lower commissions and
steeper discount deals made possible by subsidies from the
online daily deal websites themselves. As of September 2011,
the industry average for commission collected by Korean
online daily deal companies was around 10% as opposed to
the 50% collected by Groupon in the States.
In addition to the online daily deal sites themselves,
sites which aggregate deal sites also began to emerge soon
after the daily deal trend caught fire in the nation, thus
making repeated checks of various online daily deal sites
unnecessary. The aggregator sites, or meta-sites, were estab-
lished to play a hub role for the online daily deal sites.
TICKETMONSTER.COM
Services
Business Model
Organization
Marketing
Technology
COMPETITION
Coupang.com
WeMakePrice.com
International Competitors
International Expansion
50% share of South Koreas online daily deal market after one
year of operation. Daniel Shin believed that Asia represented
the most logical market for TicketMonster to grow in, and
hoped to make acquisitions or open up branch operations in
Singapore, Vietnam, the Philippines and Japan within a year.
This strategy was described by Shin in an interview with the
Wall Street Journal: We kind of accidentally found ourselves
in the top five on the strength of South Korea alone. We
thought we not only could expand in Asia, we should.
High online penetration in North Asia has helped
fast-track the development of e-commerce in markets. Daily
deals services are particularly well-suited to Asian mar-
keting landscape, where tactical sales drives and loyalty pro-
grams are especially prominent. Even though it was evident
that TicketMonster grew faster than any other online daily
deal sites in Asia, the competitions were getting tough for
this fastly growing markets. In Singapore, Groupon was very
aggressive with online advertisement from online display,
search engines to social networks. Deal.com.sg and BigDeal.sg
are active in Facebook and Twitter to secure customer base.
LivingSocial got into the market by differentiating their ser-
vices by introducing Family Edition deals, focusing on family-
friendly activities such as visits to zoos, aquariums, and art
classes. Prominently, All Deals Asia is a Singapore-based
site which aggregates deals from prominent daily deals sites
across the Southeast Asian region including Singapore, Hong
Kong, Thailand, Philippines, Malaysia, Taiwan and Indonesia.
the local site named Groupsmore in early 2011. After that, the
trend of shopping online with the coupon has really trending
up. Groupon Malaysia is said to be the countrys biggest
daily deal site pulling in more than $1.55 million in rev-
enues for August 2011. Everyday, which ranks second, took
in $580,000. The site of Everday collected 400,000 subscribers
and was targeting to achieve RM10 million of annual revenue
by the end of 2011.
Indonesian daily deal market was exploding as well.
Since going online in mid-2010, such popular websites as
Disdus, Evoucher, Dealkeren and Ogahrugi offer daily deals
online from steaks and lavish haircuts to international hotels.
Thailand was also filled with plenty of clones are
starting to emerge to have the bargain customer base. It was
unique that all of the daily deal sites in Thailand abandoned
the minimum interest policy and instead set a time limit for
each deal due to the government regulations. Ensogo, the
biggest group site in the Thailand, received a US$2 million
in fresh investment from Europe. Ensogo had a big following
with more than 10,000 Facebook fans and a regular pipeline
of deals. The site with the name of O.ffer.us provided higher
value than other sites with neither the minimal user interest
policy nor time limits with its offers.
Even though a number of Groupon copycats existed
in this emerging market, the industry experts expected that
there is more room to grow. Almost every county in Asia
came to have a number of online daily deal sites, which
THE DECISION
REFERENCES
Times.
27. The rise of Thailands Groupon clones, http://www.cnngo.com/
by MONASH UNIVERSITY on 05/18/15. For personal use only.
bangkok/shop/rise-thailands-groupon-clones-104460.
28. TicketMonster.co.kr.
Exhibit 1
Ticketmonster.co.kr Website
Asian Case Res. J. 2014.18:401-428. Downloaded from www.worldscientific.com
by MONASH UNIVERSITY on 05/18/15. For personal use only.
Exhibit 2
GROUPON, INC.
07_S0218927514500151.indd 422
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
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/RVVIURPRSHUDWLRQV Asian Case Res. J. 2014.18:401-428. Downloaded from www.worldscientific.com
by MONASH UNIVERSITY on 05/18/15. For personal use only.
07_S0218927514500151.indd 423
2009 2010 2011
%DVLF
'LOXWHG
2/2/2015 3:16:45 PM
424ACRJ
Exhibit 3
As of December 31, 2011, the book value of our LivingSocial investment was $208 million. The summarized financial
information is included for the periods in which we held an equity method ownership interest.
Source: Edgar Online Amazon Form 10-K
Exhibit 4
Source: Discounters Make Deal Aimed at Asia, Wall Street Journal, June 1, 2011
Exhibit 5
Exhibit 6
TV Commercial
Exhibit 7
Distribution of Visitors to Online Daily Deal Sites in Korea during a 24-hour Period
coupang wemakeprice
Asian Case Res. J. 2014.18:401-428. Downloaded from www.worldscientific.com
by MONASH UNIVERSITY on 05/18/15. For personal use only.
Exhibit 8
Above 50
40s
30s
20s
Under 19
Exhibit 9