LivingSocial, the second largest daily deals site, will be using their $183 million investment from Amazon and Lightspeed Venture Partners in an attempt to beat out Groupon as the market leader in social buying. The company plans to more than triple its workforce next year to 1800 and to double its reach to cities it will serve. This would bring the number of cities served to 300, approximately the same number Groupon currently serves with 3000 employees.
In a Bloomberg interview last week, LivingSocial’s CEO, Tim O’Shaughnessy commented on the advantage the Amazon investment gives them:
“Having a $183 million investment is an important part of making sure we’re not bringing a knife to a gunfight. If you want to be the biggest player in local commerce, having an investor that’s the biggest player in e-commerce seemed like a really smart thing to do.”
LivingSocial also plans to focus more on excursions such as skeet shooting and beer tasting. The company bought Urban Escapes this past October. Urban Escapes offers deals on vacations, guided tours and other events. Within just a few weeks LivingSocial had sold more than 10,000 trips which it calls “Escapes” According to O’Shaughnessy, these types of deals do carry more risk than the more traditional deals since they involve renting out a venue in advance but they also typically have higher margins than most products sold on daily-deal sites.
Can LivingSocial actually over take Groupon to become king in the coupon market? They’re going to attempt to do with 1800 employees what it takes Groupon 3000 to do. Does LivingSocial have a secret plan for efficiency up their sleeve or will they find themselves in over their head when a lack of customer service creates some very unhappy consumers and merchants? Do they need to make an upward revision on that projected 1800 employees?