The local arms of digital media companies such as MSN, Sina and Yahoo were among the first media owners in Hong Kong to offer daily deals, tying up with companies such as Groupon and BeeCrazy, which specialize in crowdsourcing customers for local retailers.

Recently more traditional names have followed, including CNN via its travel site CNNGo and South China Morning Post, both providing more targeted services.

Two years after daily deals sites first took off in Hong Kong, more media owners in the city are jumping on board, taking the first steps to tap new revenue streams from ecommerce.

Partnerships benefit both sides, providing deals sites with added credibility as well as access to large audiences, while publishers can gain audience loyalty and additional revenue from advertising and a share of deal revenues.

However, some media owners are looking beyond the sector, seeing daily deals as the pathway to a broader ecommerce offering.

Deals, an aggregated service Yahoo Hong Kong launched last year, is the local portal’s second venture into ecommerce after an online auction site that’s been in operation since 1999, but high take-up has persuaded Yahoo to speed up exploration of similar services.

“Because of the success in our Deals market, we believe there is lots more room for merchants in Hong Kong to start thinking about online e-shopping,” explains Mark Liu, Yahoo Hong Kong’s ecommerce director. “This is one phenomenon no one can neglect in the near future.”

Ecommerce can be integrated throughout Yahoo’s site rather than be developed as a discrete offer, Liu suggests, with the site providing expertise to traditionally minded retailers who have yet to give the discipline much thought.

“Now is the right time,” Liu adds. “We are in close discussion with a few merchants on becoming their online e-shopping representative. Watch this space.”

Content and commerce

Other media owners are also interested to see where collaboration with deals companies may take them. CNNGo soft-launched a deals service for its Hong Kong site without much fanfare late last year, initially positioning the service, run with travel specialist Twangoo, as a value-add to its readers.

“This is more of a pilot initiative for us to develop our services strategy,” explains CNNGo VP Bikram Sohal. “Our main business is content. We are a media company, but we are looking at ways to expand our offering, and the group buying concept is one of them.”

The site also provides a branded booking service in collaboration with Expedia, but so far that’s the extent of CNNGo’s suite of services. Sohal will review engagement measures such as user take-up and site stickiness, once the six-month trial with Twangoo ends next quarter, to decide what happens next.

“You want users to keep coming on to your site for your content,” he adds. “If you can also provide another experience that dovetails from the content, then we are happy to do that.”

Fertile markets

High online penetration in North Asia has helped fast-track the development of ecommerce in markets such as Hong Kong and Taiwan. Daily deals services are particularly well-suited to Hong Kong’s marketing landscape, where tactical sales drives and loyalty programs are especially prominent.

There are around 70 deals sites operating in Hong Kong, according to an Experian Hitwise report published last October, with Groupon and Yahoo Deals leading the pack. The market has been valued at over US$60 million, but practitioners believe there is more room to grow.

“We’re actively looking for good brands and good media companies to partner with to extend our reach,” says Groupon’s Hong Kong CEO, Danny Yeung. “We still feel there’s a big potential in the daily deals space. We just need more and more people to find out about it.”

In Hong Kong, Groupon has already tied up with portals such as MSN and Sina as well as local discussion site Hong Kong Golden Forum and tourist information site Macau.com.

Yahoo's Liu is also keen to build up Deals as well, adding mobile and social functionality while seeking additional partners to fill more niches. The site currently curates offers from five separate providers.

Different approaches

There are a number of ways media owners can play in this space. In Taiwan, Yahoo operates both an aggregated service, where it hosts selected deals via its partners, as well as a platform that helps drive traffic to the deals sites. In Australia meanwhile, Yahoo7 acquired local site Spreets for US$43 million.

Some however are keeping an open mind on how early experiments in this area will pan out. RedeeMe, a new deals website launched by South China Morning Post at the start of the year, isn’t seen as presaging a bigger move into ecommerce just yet.

“We are careful to test the water on any new venture,” says the publisher’s director of marketing, Anne Wong. “Ecommerce is certainly a consideration but we also have many other priorities that we are managing as a news organization.”