Groupon Loses Market Share in 2nd Quarter as Daily Deals Decline

Yipit

Groupon's North American market share fell while LivingSocial's gained in the second quarter, according to Yipit.

At Groupon, daily deals are fading. That’s the message the company sent many investors this week when it reported a decline in gross billings, or the total value of goods and services bought on its site, between the first and second quarters of this year.

While demand for online coupons may be cooling off, competition is rising, according to new data from Yipit. The deals industry researcher found that Groupon’s market share in North America shrank to 53 percent in the second quarter, down from 56 percent in the previous quarter. Meanwhile, LivingSocial grew its share to 22 percent, up from 20 percent.

Travelzoo grew to 3 percent of the market, Yipit said. AmazonLocal, a partnership between LivingSocial and Amazon.com, kept its 2 percent share of the daily deal business.

While it’s not the first time Groupon has given up market share, “this was the first sizable shift backwards in well over a year,” said Unaiz Kabani, product manager for New York-based Yipit.

In North America, Groupon’s gross billings from daily deals fell 2 percent in the period, Kabani estimated, while LivingSocial grew 15 percent.

Paul Taaffe, a spokesman for Groupon, and Brendan Lewis, a spokesman for LivingSocial, declined to comment.

Like Groupon, LivingSocial is looking to expand beyond daily deals. Last month, the Washington-based company announced LivingSocial Shop, an e-commerce store for discounted furniture, clothing and other goods. The site mirrors Groupon Goods, a shopping site started last year that accounted for most of Groupon’s sales growth in North America in the second quarter.

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