Celltick, which integrates mobile payments, targeted marketing and coupons via partnerships with payment providers such as telecoms, plans to target Europe and North America with a program that it contends will provide better customer retention than Groupon, which has embarked on its own mobile payments expansion to improve relationships with merchants.
"We are starting to see a lot of traction and adoption of our mobile app Active in developed markets [North America and Europe]. We will very soon look at possible commerce creation from this app in the developed markets," says Ramgopal Vidyanand (Anand), vice president of corporate marketing and business development for Celltick.
Active is a new lockscreen app from Celltick that allows Android users to personalize phones based on context and location, as well as quick navigation to frequently used apps. In mobile payment partnerships with companies such as Azercell, a telecom in Azerbaijan, Active is used to deliver relevant coupons and offers low-cost mobile payments. It is a key part of Celltick's attempt to compete with Groupon by mixing marketing with low transaction fees and a better revenue sharing agreement.
Anand did not offer a specific target date for a formal push into North America and Europe, saying organic uptake of Active and other services would inform future moves such as marketing.
Celltick sells managed tech to target consumers on the home screen of their mobile devices. It also sells scale. In 2012, it powered mobile commerce transactions for virtual and physical goods serving more than 140 million active consumers in two dozen countries. In India, Ukraine, Azerbaijan and Brazil, Celltick sold more than 5.8 million mobile coupons in 2012.
But taking on Groupon in a market like the U.S. will be a challenge, given Groupon's brand advantage over Celltick (one analyst we contacted had never heard of Celltick), as well as Groupon's own diversification as it builds out new services such as mobile payments.
Groupon's traditional model offers daily deals, or "Groupons." If a certain number of consumers register for an offer, the offer is available to all who sign. A Groupon for a $100 product may be sold for $50, for example. In this case, the consumer pays $50 through Groupon, and Groupon and the merchant split the $50. Groupon's critics have claimed it doesn't attract repeat business — a 2012 Susquehanna Financial Group and Yipit report found that more than half of retailers that had experience with daily discount sites such as Groupon and LivingSocial were not attracting repeat business.
Groupon has been looking to expand beyond this model, and has been opening its own wallet to do so. A series of recent acquisitions include its fall 2012 purchase of Savored, which offers discounts at restaurants to consumers who agree to eat at a predetermined time. Other 2012 acquisitions include FeeFighters, a comparison shopping site that helps businesses optimize their search for an account.
Celltick contends its model is better positioned to retain consumers for a series of transactions by providing more options to merchants. In one option, the consumer pays a small amount to Celltick but can access the discount directly with the merchant by using a unique code. In the other model, the merchant pays for the distribution of the coupon, and the revenue split, while it can vary, is far less than the 50/50 split of the traditional Groupon model.
Celltick's models, particularly when used in concert with the company's marketing technology, provide merchants with more control, Celltick claims.
"We also make sure that as information about the user redemptions comes back to us that we optimize on that merchant being able to target the same user and continue their relationship with them," Anand says.
Celltick recently added telecom operators in India, Chile, Argentina, Zambia, Nigeria and the Philippines, and is prepping a new mobile commerce platform that will allow companies to initiate their own mobile marketing campaigns that include electronic mobile coupons.
During the holidays Celltick implemented a mobile marketing campaign for one of its clients, Coca Cola, in partnership with Dialog, Sri Lanka's largest cellular service provider. The campaign reached more than 2 million consumers and resulted in a 400% increase in mobile downloads of holiday ringtones and wallpapers.
Groupon defended its record in a statement to PaymentsSource, though it would not directly comment on Celltick.
In 2012, about a third of North American Groupon transactions were completed on mobile devices, an increase of nearly 30% compared with October 2011, Groupon says. Also, on Black Friday 2012, transactions were up 140% since the prior year, driving more than 40% of total transactions and more than half of Groupon Goods' transactions; and the average North American Groupon mobile customer spends 50% more than its customers who have never made a purchase on a mobile device.
Groupon Payments Product Director (and former FeeFighters CEO) Sean Harper discussed the company's aggregation and analysis capabilities that aid in targeted marketing—and its Groupon Rewards product—in a recent interview with PaymentsSource.
The marketing heft that worked wonders with Coke will be necessary, given Groupon's diversification. The competition is stiff and Celltick's pricing models alone won't be enough to attract consumers, says Denee Carrington, an analyst at Forrester Research.
"Relevance is the key with the offer space … I would wonder how they target and what consumer information they have access to ensure that the right offers are served up to the best customers," Carrington says.