Paypal has decided to infiltrate the confined space of daily deals along with the likes of Groupon, Amazon, Living Social and thousands of other companies that barely register on the pie chart since an estimated 73% of the market is owned by Groupon and Living Social, according to Yipit. Living Social has managed to stay under the radar unlike Groupon who has been plastered with negative media about their business model, internal practices and lawsuits, not to mention a rather disappointing IPO. Chances are that sometimes Groupon even questions the viability of daily deals but Paypal feels they can make a name in that space for two reasons: they already have 103 million users and they are more familiar with what their users like.
More specifically, what Paypal wants to target are daily deals for the mobile space, not simply targeting deal placement on the geographical location of a city or zip code like Amazon. This is something that Groupon made a big deal about in their IPO roadshow: a targeted method to deliver deals based on current location. Users would be notified of a deal for a retailer when simply walking by their location. Groupon also made a big deal about being able to target deals based on consumers' personality and preferences. The live example they gave during their IPO presentation was notifying an adrenaline junkie of a deal for half-off a couple laps around a NASCAR track. Still, Paypal feels they know their customers better. According to President Scott Thompson,
The experience is going to be completely different than anyone else's, through and through. We'll only give you something that we think fits the category of unique and relevant. Everyone else is going to bombard you.
There are some other reasons why Paypal may want to enter this arena besides their "we know our customers better" reasoning. Find out more after the break.