Assuming Amazon is still gung-ho on the cloud, it may not invest significant capital into competing with Groupon. Currently, Amazon.com, Inc. (NASDAQ:AMZN)’s attempt at Groupon’s business is through Amazon Local. That being the case, I highly doubt Amazon Local will be as successful as Groupon because Groupon is highly differentiated for a web-based company. While Amazon’s brand identity is strong, it doesn’t mean it will garner enough market share to be seen as a significant threat to Groupon Inc (NASDAQ:GRPN). Remember, Amazon’s marketplace failed to take any significant market share away from eBay Inc (NASDAQ:EBAY), and the same might happen in the coupon space as well.
eBay is another entrant in the coupon space. Currently, eBay’s service is called eBay lifestyle deals. While I applaud eBay at its novel attempt at trying to take market share away from Groupon, I have to remain a skeptic as eBay’s success has been fairly limited. In fact, in eBay’s latest earnings release, the company didn’t even bother to report the eBay’s lifestyle deals as a separate segment. This means that eBay’s Lifestyle deals’ effect on total company performance is likely to be immaterial. eBay Inc (NASDAQ:EBAY)’s primary growth will be driven by PayPal along with the international marketplace. Assuming those two divisions continue to grow, eBay’s performance will continue to improve at a fairly steady pace.
Groupon Inc (NASDAQ:GRPN) is the best place to get coupons on local deals. The CFO of Groupon stated that in most of its international markets, it is number one or number two in market share. Its heavy investment into building the 48 markets it operates is why the company has been able to outperform the competition.
The company’s dominant market positioned, paired with its strong branding along with long-term experience in the business is why Groupon should remain competitive even in an market being crowded by Amazon and eBay.
The article This Company Is Getting Better and You Shouldn’t Ignore It originally appeared on Fool.com and is written by Alexander Cho.
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