Across the ditch there is some consolidation going on in the daily deals market. Living Social is the worlds second largest daily deals website behind Groupon. In 2010, Living Social purchased more than half of local Aussie site Jump On It for $5 million dollars. The plan, at that time was to keep the two separate deals sites operating: Living Social, and Jump On It.
In 2011, the original creator of Jump On It Adam Rigby became the head of LivingSocial Australia. It was only a matter of time before the larger site Living Social swallowed the smaller site. The purchase of JumpOnIt put LivingSocial in contention to be the largets provider of daily deals in Australia, and less than a year later they had indeed become the No1 Australian Daily Deals site.
In March 2012 Living Social purchased the remaining portion of Jump On It that it didn't own for a reported 30-40 million total price. The announcement last week was the JumpOnIt site has been closed down and all members transferred to Jump On It. And from a business perspective it makes sense. Why have two separate brands in the same country. It costs money to run two different businesses, and at the end of the day, buying owning both site they were competing against themselves!
What's not clear is how smooth the transition will be. JumpOnIt is a well loved Aussie site that was one of the first sites launched, back in 2009. Customers tend to get used to brand they know and are now being forced to use Living Social (their login details and email addresses were all transferred to Living Social). Our guess is that a good portion of users may reject this and look to other locally owned sites.
While LivingSocial has owned part of JumpOnIt for about 2 years now, JumpOnIt was an Aussie brand. Some users say that the LivingSocial interface, and they way they structure deals isn't as good as the local sites. I also think that their sales force may have a bit more trouble getting local merchants on board who would rather use an Aussie site, than an internationally owned one.
From a business perspective it is obviously great for Living Social. They can combine the 2 separate sales forces and unify under one brand. They now have one single membership base which they can combine and use towards striking bigger deals with national brands. (They have started to do this, with their recent Pizza Hut deal). But as for customers, time will tell as to how well this larger site performs on a customer service basis.
