LivingSocial Gains on Groupon

Competition appears to be heating up in the daily deals space, with LivingSocial gaining ground on market leader Groupon following a popular 50 percent off Amazon promotion it ran January 20.

According to data from Hitwise, LivingSocial's traffic surged 80 percent in the week beginning January 17, while visits to the Groupon site declined 20 percent in the same period. Although those gains are likely a direct result of the extremely popular Amazon promotion that ran that week, they imply that market leader Groupon may not have an insurmountable stranglehold on the space.

The direct correlation between LivingSocial's gain and Groupon's decline also suggests a possible saturation in the market, given that a spike in traffic for the former appears to come at the expense of the latter. It would appear, therefore, that consumers are choosing to visit one or the other, as opposed to both. Of course, that trend could simply reflect less popular deals being offered by Groupon that week.

For the week ending January 22, LivingSocial attracted over half the traffic of Groupon. It remains to be seen if LivingSocial can capitalize on that surge in traffic and maintain an increased audience, however.