Groupon announced that it will acquire its copy-cat service in Korea for US$ 260 million, which consists of US$ 100 million cash and Groupon stocks equivalent of US $160 million. Daniel Hyunsung Shin, the founder and present CEO of Ticket Monster, sold his company to LivingSocial for US$ 350 million in 2011 which was one year after the founding of the company. As seen from the fact that LivingSocial will sell Ticket Monster lower than its acquired price, either the financial record or prospective growth of Ticket Monster does not look optimistic for now aside from the liquidity problem Living Social has.
Why is Groupon buying Ticket Monster? It was released that Groupon needed the cornerstone with a high market share to expand into Asian countries. However, there are a few prospective targets, which meet these strategic objectives. As seen that Groupon Korea could not compete with local players, a daily deal is a highly local based market that grabs local consumers’ preferences and interests rapidly and focuses on them with effective marketing. In Korea, Ticket Monster vies with Coupang for the number one market share and its revenue is estimated at about US$ 100 million to 130 million. In light of extension to Asian Pacific market, Ticket Monster is a good option to Groupon.
What will be different from now on? Nothing much for the time being. It is reported that Groupon will operate Ticket Monster independently for the time being. Interestingly, Daniel Hyunsung Shine said that Ticket Monster aspires to become a company like Amazon in Korea and in that sense, this deal will have a great synergy for Ticket Monster to move to the next phase by leveraging Groupon’s R&D and knowhow.
It is clear that a daily deal market in Korea has become a meaningful online sales channel. However, the growth of the market seems to get slower and companies are not differentiated from each other. Many applications and functions that intended to obtain mobile shoppers are not actually beyond a test level. They’ve already returned to the discount and variety of deals for the market share. If Ticket Monster pursues Amazon, it should be more innovate.
Reference Sources
– Architect Partners
– Crunch Base
– Consumer Times (Korean)