New research from Hitwise suggests that social-buying site LivingSocial has gotten off to a running start in 2011. A January traffic surge has helped the company close the gap with Groupon, getting
more than half the share of visits of the category leader. Two months ago, Groupon had a 10-to-1 traffic advantage over Living Social, according to the Web measurement firm.
Hitwise
attributed the traffic spike to LivingSocial's "door-busting" $10 for a $20 Amazon gift certificate deal this month, which brought in more than $13 million in sales. That topped the previous record of
$11 million that a national Gap-Groupon offer took in last August. However, the Amazon deal was criticized as a marketing ploy -- since unlike typical deals where LivingSocial takes a 30% cut of
sales, it bought the gift cards from Amazon and sold them itself.
Amazon recently invested $175 million in LivingSocial, so an increase in business for the deal site also benefits the online
retail giant indirectly. The gift certificate offer led to reports of complaints about canceled orders, unauthorized charges and other issues related to the promotion.
"Despite some claims of fraud and issues with customer support LivingSocial's 80% traffic surge last week (and Groupon's 20%
decline in the same time period) proves that the race for dominance in the group coupon space is far from over," wrote Bill Tancer, general manager of global research at Hitwise, in a Jan. 27 blog post.
LivingSocial had 2 million U.S. unique visitors compared to 3.9 million for Groupon as of Jan. 16, according to the latest comScore data. But the
cut-off date falls just a few days before the Jan. 19 Amazon deal, so the numbers don't show what kind of bounce LivingSocial got from the deal. However, the site's traffic had already roughly doubled
from 1.1 million in mid-December.
A growing online audience is one thing, but what about any gain in registered users? LivingSocial said Friday that it had added 5 million subscribers worldwide
so far in January and expects to end the month with 20 million overall. That compares to about 50 million for Groupon. Does that mean more Amazon offers are on the way from LivingSocial? "We're always
exploring opportunities to offer really amazing deals locally and nationally and working hard to identify the next big deal," stated a LivingSocial spokesperson.