E-commerce and

Groupon-like with Magento

Nguyen Vu Hung, HanoiLUG2012/01/AITI-APTECH, Hanoi

Agenda

1. Self Introduction2. Business Model3. Revenue Model4. Views of Sellers and Buyers5. Groupon-likes in Vietnam6. Groupon-like with Magento 7. So, what are the problems8. Related topics8. A New Business Model9. Q&A

Agenda (2)

1. Self Introduction2. Business Model3. Revenue Model4. Views of Sellers and Buyers5. Groupon-likes in Vietnam6. Groupon-like with Magento 7. So, what are the problems8. Related topics8. A New Business Model9. Q&A

Self Introduction

● A FOSS activist● Offshore software development● System Adminnistrator● High Availability Engineer● 2 years working with Magento● About to start a new business with Magento

GROUPON BUSINESS MODEL

Customer signswith Groupon

Deal reaches critical mass

Customers pay

Groupon

Payments spread out in 3 installments over lifecycle of deal, leading Groupon with negative working capital

Notable sources:

Groupon pays merchant share

Merchant signs up

Customer redeems coupon at merchant

http://primitus.com/blog/whats-the-secret-success-of-groupon/

Groupon features

deal

Overcharged

Can not secure buyers

A BETTER BUSINESS MODEL

Customer signswith Groupon

Deal reaches critical mass

Customers pay

Groupon

Payments spread out in 3 installments over lifecycle of deal, leading Groupon with negative working capital

Notable sources:

Groupon pays merchant share

Merchant signs up

Customer redeems coupon at merchant

http://primitus.com/blog/whats-the-secret-success-of-groupon/

Groupon

features deal

● Customers show “coupon” at merchants to get discounted

● No payment needed

NEW REVENUE MODEL

Customer signswith Groupon

Deal reaches critical mass

Customers pay

Groupon

Payments spread out in 3 installments over lifecycle of deal, leading Groupon with negative working capital

Notable sources:

Groupon pays merchant share

Merchant signs up

Customer redeems coupon at merchant

http://primitus.com/blog/whats-the-secret-success-of-groupon/

Groupon

features deal

Revenue = Advertisment.

Business Model Keypoints

● Free on submission for merchants● Pay for top posting● Social marketing● Printed/Mail/SMS based scout/discount

● Directly sent to user’s email– OSOS takes no commission, cheaper for customers and merchants

● Product Review● Users’ feedback (non-biased)

● Feedback ranking, lottery for writing feedback (coupon?)● Prefecture-based ● Service classification● Monthly discount/lottery● “User-only price”

ECONOMIC CHARACTERISTICS

Notable sources:

Plusses

• Brand• Economies of scale (‘winner takes

most’)

Negatives

• Lack of network effect• No technology barriers to entry• No switching cost for merchants

and customers• Scaling is expensive (sales people

on the ground)• High cost of customer acquisition

http://techcrunch.com/2010/10/17/why-groupon-is-no-ebay/

Seller's views

● Benefits (compared to Groupon)● Online marketing cheaper than Groupon● Be able to manage its own customers● Mail marketing● Networking with its customers● Easy to scale (using existing users)

• Groupon– Merchants pay commission on posting

• New Business Model– Merchants pay advertisement: top-posting, banner

MERCHANT PERSPECTIVE ON CUSTOMER INTERACTION

Notable sources:

Merchant

http://gigaom.com/2010/09/29/hey-groupon-its-time-for-a-localsocial-roll-up/

Get customer to follow on

Offer on Like it on

Advertise on

Ad.

Get +1

Ad.

Muachung: Backed up by a big media commany: VC CORP

Backed up by diadiem.com, and a PR commany in the group

Social network marketing

With phununet

Magento

Main Features:CheckoutPayment (Bảo Kim, Ngân Lượng)Customer AccountOrder ManagementMobileMulti Store

The Problems with Groupon

● High Commission● Unstable● Can not secure customers● Not really effective PR

Related topics

● Traditional Marketing (Newspaper, TV)● Digital Marketing● Media Backup● Social networking (Facebook, Twitter)

● Exponential growth

● Customer Behavior (Buyers')● As cheap as it can be

Xu Hướng Công Nghệ

● Mobile● Tablet● Cloud● Ảo hóa● iOS/Android● HTML5

Định Hướng Nghề Nghiệp

● Kỹ năng● Kỹ thuật● Phi kỹ thuật

Lựa Chọn Ngôn Ngữ

● C#● Java● PHP● C++● Ruby, Python● Bash?● COBOL

Xu Hướng Mở

● Free and Open Source Software● Google: FOSS business model

● Xã hội hóa nội dung● Wikipedia● OpenStreetmap● OCR with Captcha-like

Cồng Đồng Mã Mở Việt Nam

● Cộng đồng ● Lugs

– Vietlug, HanoiLug, SaigonLug, Ubuntu-VN● VFOSSA● Java, Agile, Scrum

● Doanh nghiệp● Customize, deploy: Netnam● Integration: iWay ● Development: NukeViet

Các Vấn Đề Khác

● SNS● Digital marketing● Bảo mật● Tối ưu hóa● High Availability

Thank you

Q&A

Nguyen Vu Hung, HanoiLUGEmail: vuhung16plus@gmail.comTwitter: @vuhungFacebook: vuhung16plus@gmail.com

http://slidesha.re/sdKrfJ

References

● http://www.magentovietnam.com/● http://www.sieumua.com/● http://www.magentocommerce.com/● “A study on Groupon.com” on Slideshare.net● “Groupon business model” on Slideshare.net

E-commerce and

Groupon-like with Magento

Nguyen Vu Hung, HanoiLUG2011/12/17PHP Day 2011, Hanoi