CEO of Groupon Malaysia, Joel Neoh. Photo from joelneoh.com
On January 26, Groupon made its foray into Malaysia when it announced the acquisition of GroupsMore, a group-buying site built by YouthAsia.
With the purchase of GroupsMore, Groupon has now acquired five group-deal sites in the Asian region within the span of two months, the others being Beeconomic in Singapore, uBuyibuy in Hong Kong, AtlastPost in Taiwan, and more recently SoSasta in India.
In an e-mail interview with the CEO of Groupon Malaysia, Joel Neoh explains to us his views on the future of the group-buying model in this country now that Groupon has arrived.
Why do you think Groupon chose to acquire GroupsMore over the competition in Malaysia?
I’m not exactly sure how they selected us, but I can take a wild guess based on how I would select a Groupon clone if I was them: Groupon can easily grow revenues and member numbers easily by simply investing money, but what I think would be critically important is the pioneer, management, and founding team. I noticed is that the companies that they acquire have similarities in cultural fit where the founders are mostly young adults who are highly entrepreneurial and passionate about what they do.
What will happen to GroupsMore’s operations in Malaysia?
We will continue to run independently, where I’ll take the lead as CEO of Groupon Malaysia, and (YouthAsia partner) Ng Khailee will remain in YouthAsia to continue pursuing our social advertising business Says.my.
At this point of time we’ve always had a team of less than ten people – we’ll need to grow headcount in the next few months to accommodate our growth to reach out to more Malaysians to try something new.
There won’t be too many operational changes beyond increasing the headcount. However quite a number of our employees will be sent to visit the Groupon offices worldwide to learn and share best practices and meet the awesome Groupon peeps. (Neoh tweeted later: “Groupsmore team going places. After announcement of Groupon Malaysia: some are London-bound, some are Chicago-bound”)
Has this been an exit strategy for GroupsMore all this while?
We never really thought too much of the exit strategy when we started. We identified it as a good business model that is in line with our belief in the “collective power of people”; prior to GroupsMore, for example, we had more than 88,000 youths to fully organize and participate in the country’s youth festival. So we think that this group-buying model was highly scalable. Groupon contacted us end 2010 and here we are today under Groupon.
How will Groupon’s entry into Malaysia change the uptake of the group-buying model – do you think there’ll be a greater influx of deals and buyers now? Are you expecting the proliferation of groupon clones to drop away?
Collectively across all group buying sites in Malaysia, I don’t think there are currently more than 200,000 who subscribe and fully understand the model. With the entry of Groupon into Malaysia with us, the ambition now is to grow that 200,000-strong base and bring the concept to the masses. Eventually, we hope that group buying online would be something as commonly done as buying a SIM card.
As for Groupon clones, I think its eventual for the clones to drop – as I’ve said before – whether Groupon enters Malaysia or not. This is only because if they don’t scale to a certain size, they’ll be in the red every month. The group-buying model needs volume to succeed.
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