Continuing from our previous coverage of the daily deals market in the Baltics, we're taking a look at the Danish market with information and analysis provided to us by Bownty, the leading daily deals aggregator in Denmark. The company provides a service similar to what Kayak does for air travel; they collect and put together the daily deals for more than 600 cities around the globe, to the point where at any given time more than 4500 deals are available on the service.
Bownty is in a nice postion to give some analysis about the market because as an aggregator, they have little conflict of interest in exaggerating the data. We talked with CEO and Co-founder Steffen Frølund and gained access to data from the several hundred-thousand deals that have been run through their platform.
Looking at revenues, the team behind Bownty estimate the total daily deal market in Denmark close to DKK 350 million (around €47 million), depending on how daily deals catch on during the Christmas shopping season. Frølund says that so far the Christmas season is providing a small boost to the daily deals market, and December has begun around 15%-17% percent higher than the first week in November.
The market is quite crowded with 25 active organizations. Frølund says that within Europe, Denmark probably has most deal sites per capita except for Greece. And it's a quite competitive market, according to Frølund, "It is really a market where the individual deal wins the attention and people shop around between services." The daily deals industry as a whole faces this systemic problem, which is likely why it is hard to have loyal customers.
Currently the market consists of two leaders, Downtown and Sweetdeal, who are almost identical in size. By analyzing the deals run through Bownty's aggregator, Frølund estimates the two companies' yearly revenue at around DKK 100m (€13.4m) for 2011.
Following those two leaders are Groupon, MyDeal, Dagensbedste, Spotdeal, Krakdeal, Tipster, Dealhunter and Takeoffer, who all together have roughly the same market size as Downtown or Sweetdeal individually.
And chasing for a better share are 15 smaller players who are either more provincial or late arrivals to the market: Deal.dk, Cityscoop, DaybuyDay, Dealicious, Greed, Slåtilnu, Happydeal, Justhalfprice, Luxusdeal, Winedeal, Rabattenidag, GoSave, Pinq, Lauritz OneBid, and Tilbudibyen.
Frølund tells us, "Tipster.dk has been growing relatively fast and Downtown has been a small step behind Sweetdeal lately. Other than that the market is pretty stable at the moment, besides some minor sites closing and new hopeful ones appearing."
The single best selling deal by volume was around 5000 vouchers for brunch at restaurant Bakkens Perle in northern Copenhagen, and was negotiated by Sweetdeal. Sushi has also been a popular deal; 3 out of the 6 best selling deals were for sushi.
What's surprising is that the best grossing deal of the past year has been for breast implants, at DKK 18 500 (€2 500) per voucher. Sweetdeal sold around 500 of these.
In the Christmas season Frølund tells us, "It’s basically been more of the same deals this Christmas with restaurant deals selling well. The one exception is for photo-calendars you design yourself, upload pictures, and get printed. It’s not so much on sales volume but on amount if individual deals these calendars have been quite prominent."