- Groupon is a campaign push model. Having access to campaign channels to push new products, or support periods with low business volumes in an industry with high fixed costs is an advantage, but it will never change the normal, day-to-day support that Just-Eat provides. Our model secures restaurants a steady flow of orders every day, all year round.
- Groupon typically charges 40-50% of the transaction value for their services, our average is around 10%. That makes a massive difference for a restaurant and underscores the point above. It is not sustainable to have a significant part of your business brought in via Groupon week-in and week-out.
- Groupon works together with all local merchants, Just-Eat focuses 100% on delivery restaurants. This means, that even though the core of our relationship with the restaurants is based on providing a steady flow of extra orders, then we do a lot of other things for the restaurants. For example, we provide customer care, great discount offers on products and services they need to do business, technology services, we invite them to restaurant conferences to get news from the sector, etc. Our ambition is to be significant and integrated partners with the delivery restaurants.
- As a minor but not irrelevant point, it is worth mentioning, that the mechanism used to support the transaction on Groupon and other group buying sites result in some level of manual, administrative work for the restaurant. At Just-Eat we provide digital two-way communication between our servers/customers and the restaurants via our terminal technology, i.e.everything incl. billing is automated and very easy to manage for the restaurant.
Groupon vs. Just-Eat
Recently many have asked me about the relationship and difference between online takeaway ordering via Just-Eat and group buying via Groupon. That is natural given the phenomenal growth of the group buying concept, the fact that they are a local concept just like ours and because some of Groupon's many vouchers are related to the restaurant industry. In reality, there is not a lot of overlap between the Groupon and Just-Eat use case. The differences are much bigger than the similarities.
For the restaurants perspective, the key differences are as follows:
Hi Klaus,
According to my UK based working experience. The most important key differences between us and groupon in UK is:
1 the business partners we are targeting: actually , the majority of our restaurant partners are small takeaways not large dinning in restaurants. we are targeting this specific area which will be more professional and functional, to the online consumers. The hungry bellys have the objective in mind when they search on Just-Eat
They know what they can find out on Just-eat which is the takeaway food even before they visit our website. Like you mentioned, “Groupon works together with all local merchants” End users visit groupon website for massive discount from different bussiness.
2 So that will come to a key conclusion -The profit. Takeaways profit in Uk these days reduced a lot, I can say only 30%-40% profit left due to food cost and VAT increased. Takeaway business 100% can not afford to pay out more than 15% to get large vulume of orders even they will not be able to handle due to Immigration Cap which mentioned by David Buttress blog. Only very large profit restaurants can afford to use groupon, but not our delivery takeaways.
Personally, Geography wise I even believe our business model is much better than groupon, they can only exist in economically developed cities but our coverage could extended to whatever how small the village is as long as a delivery takeway is there. So that means the hungry bellys base we have will be definitely more than Groupon and beat them in restaurants industry. What do think?
Good point on geographic coverage, we should be able to go broader than Groupon can in the takeaway sector.