After group buying shake-out CityMob changes direction

by Herman Manson (@marklives) CityMob, the group buying site started by three entrepreneurs in Cape Town in early 2011, has made a significant change in direction as the shake-out in the group buying market continues.

Although profitable at the time the trio – Luke Jedeikin, Claude Hanan and Daniel Solomon, had decided to move away from the mass discount, quantity over quality focus in much of the group buying space. As their competitors closed up shop, including the Naspers backed Dealify and the Avusa backed Zappon, the CityMob founders had already identified their key differentiator and were planning the relaunch of their business as an online design retailer specialising in ‘flash sales’ (time-limited sales).

It was a natural evolution for the business which had specialised in sourcing high quality deals with top brands in its group buying days. Self funded to date, it didn’t have a massive database of users as some of its competitors had, and very little marketing budget, so all that was left was to compete on was product.

The entry of Groupon into the South African market shortly after the launch of CityMob helped the team up their game and taught them so hard business lessons as well, says Jedeikin, the MD at CityMob. As questions were raised as to the sustainability of the group buying business model, the entrenchment of Groupon as the dominant player in the market and deal fatigue starting to set in amongst businesses, CityMob needed to not only differentiate itself but also needed to find a position with a much higher barrier to entry, hence the move into selling products rather than vouchers.

A very civilised CityMob

A series of Facebook pages, started several years ago, has been so successful that its creator has teamed up with two friends to start a group-buying business called CityMob off the back of it. Daniel Solomon started the I Like Cape Town fan page on Facebook on a whim and has seen it grow to a group with over 30 000 members.

Solomon and his partners also run I Like Durban (with over 40 000 fans), I Like Johannesburg (more than 5000 fans), I like PE (over 8000 fans) and I Like South Africa (over 36 000 fans).

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