Groupon has big expansion plans

Groupon Inc., owner of the biggest coupon website, said it's targeting sales of 200 billion won ($176 million) in South Korea this year as it expands globally.

Groupon also aims to catch up with its biggest local competitor in attracting traffic to its Korean website in the next three to six months, Hwang Hee Seung, Groupon Korea's chief executive officer, said in an interview in Seoul today.

The online-coupon company, which offers discount vouchers for goods and services ranging from restaurant meals to spa treatments, has been expanding overseas as Chief Executive Officer Andrew Mason weighs a potential initial public offering this year. The Chicago-based company boosted its subscriber base in the past year to more than 60 million worldwide. A year ago, it had 2 million users, and its only market was the U.S.

Groupon opened its Korean site on March 14, putting it in competition with local companies such as TicketMonster Inc., which operates the country's largest daily deal website.

The number of visitors to TicketMonster's site almost quadrupled to about 3.8 million in February from September, while about 400 daily-deal sites have sprung up in South Korea over the past year, according to Rankey.com, a research company that tracks the nation's e-commerce sites.

Daily-deal services, which often target local businesses, will generate $3.93 billion by 2015, up from $873 million last year, according to BIA/Kelsey, a Chantilly, Virginia-based consulting firm.

Facebook Inc. plans to test a Groupon-like service, seeking to use its 500 million-plus members to capitalize on the surging online-deal market. The service will start in San Francisco, San Diego, Dallas, Atlanta, and Austin, Texas, the company said this month in a statement.

Facebook's entry into the “market Groupon created” may help the overall industry grow further and will drive Groupon to improve its services, Matt Zafirovski, vice president at Groupon International, said today.

“It's exciting more people join this ever-growing, ever- evolving market,” he said. “It definitely pushes us to be good. Competition is healthy.”

Groupon will focus on offering its core services in its new markets such as South Korea before introducing other offerings, Zafirovski said.

The company is talking with cash-register makers about adding features to make it easier for merchants and consumers to use its coupons, President Rob Solomon said this month.

“We want to get the basics right,” Zafirovski said.