Facebook Deals unlikely to kill Groupon says Asian digital experts

Since then, there has been no word from Facebook who have declined to comment, however Desmond Kiu who heads digital at Mindshare Malaysia said that Facebook has informed them that Facebook Deals is indeed in the pipeline for 2011.

While general opinion online seems to expect Facebook Deals to compete directly with group buying sites like Groupon, both Kiu and Ogilvy Worldwide director of their social media arm 360 Digital Influence, Thomas Crampton are confident that Facebook Deals isn’t likely to eat Groupon’s lunch.

“Consumer motivations behind Facebook Deals and group buying sites like Groupon and Malaysian site My Deals, are very different. Deals are highly location based, whereas the other two group buying sites are not location-based and runs purely on group deals,” said Kiu.

“It’s not likely that Deals alone could kill Groupon,” agreed Crampton. “Groupon does, however, face an increasingly competitive business environment. A recent study by Ogilvy found hundreds of Groupon clones in China and over two-dozen in Australia.”

Facebook’s clout comes, of course, with its huge population base. With over 640 million users of Facebook worldwide (as of 10 February 2011), 130 million of which are in Asia, it has the clout to “drive the entire social-commerce scene and even propel the take-up of group buying,” said Kiu.

In February, Malaysia had over 10 million Facebook users, which is nearly half the nation’s total population, Hong Kong over three million, and Singapore 2.3 million. Facebook Deals will make use of its base by posting every coupon purchased by a user on the user’s wall.

“Very soon, Facebook will have half of Malaysia's total population, making it the single biggest marketplace for consumers. And it'd just make sense for companies to put their deals where everyone is,” said Kiu. Facebook Deals is also, thanks to the Facebook platform, mobile-phone friendly and if a form of easy e-payment is achieved, could finally address the e-commerce barrier in Malaysia, he added.

Nevertheless, brands need to approach this opportunity with some caution, advices Crampton. “The danger brands face with Facebook Deals, Groupon and any social media platform, is how to execute something beyond a dull 'me too' tactic. Creative strategies based on consumer insights will be increasingly important to drive social media effectiveness,” he said.

Companies will need to integrate Facebook Deals or Groupon into all aspects of their business, from consumer relations to marketing, if they wish to truly create impact, said Crampton. “The social graph built by Facebook users gives Facebook Deals a distinct advantage.”