Hong Kong Daily Deals Scene Heats Up

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Hong Kong's group buying scene is set to heat up in 2012 as media companies go head to head with Groupon to launch its own daily deals site. South China Morning Post, the local English daily newspaper is apparently scheduled to go live next month, followed by two other media companies.

Hong Kong's consumer group buying space is estimated to be worth more than US$60 million per year. Currently, more than 30 companies offer daily deals in the city with Yahoo and Groupon leading the sector in the market.

Jonathan Marchbank, CEO at Dealised, a white label group buying startup has confirmed that South China Morning Post (SCMP) will be using its group buying technology platform to offer daily deals on a dedicated site called Redeeme. He also said two other media firms, which he did not identify, would be using its platform to roll out daily deals.

This underscores Dealised's acquisition of Hong Kong based group buying platform Lokaly Network and consumer deals site ValuUp from co-founder Doug Aitken through an equity deal.

In a phone interview with ClickZ.asia, Marchbank said they have acquired Lokaly and ValuUp because of a good sales force and local knowledge that will allow the company to grow organically in the Hong Kong market.

Current daily deals sites offer low value food and beverage opportunities but with a media company like the SCMP providing deals through an identifiable readership and demographic, it will attract traditional retail, F&B, hospitality brands, and higher end products to participate, he explained.

Marchbank pointed out that in markets such as Europe and the U.S., about 30 percent of recipients view their emails from deals sites on their mobile devices while in Hong Kong, the number doubled to 60 percent.

However, current emails are not optimized for mobile so the company is working to "re-engineer its buying and browsing experience" to drive higher conversions on mobile devices, he said.

With Hong Kong the first market following the Lokaly acquisition, Dealised has outlined an aggressive expansion strategy for the region either through joint ventures or acquisitions. It is in the process of entering into two or more markets in Southeast Asia by the end of Q1 next year.

Because of the diversity in this region compared to the United States, Dealised has to adopt a market-by-market strategy in Asia, Marchbank said. For instance, in places like Thailand and the Philippines, they are considering distributing deals via mobile through SMS or WAP, depending on the markets.

Dealised was formed in late 2009 to power Spreets, an Australian deals site, that was acquired by local publisher Yahoo7 for US$43 million last year.

Since then, the company has expanded to 15 countries in more than 100 cities and its clients include The Daily Telegraph and LiveBooking from the U.K., as well as mobile operators and retailers in the Middle East and the U.S.

It recently added another U.K. based customer betterNbetter, a website catering to the design community in Europe.

In July, Dealised received US$5 million funding to push its technology platform that reportedly will enable media companies and retailers in Asia and Europe compete with the likes of Groupon and LivingSocial in the daily deals and e-commerce space.

The company also announced that it has appointed Jason Keiles from Getty Images as senior VP, global business development based in London.