How to successfully bring an international brand to SA

Updated on 13 October 2014

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Last week, SME South Africa sat down with Groupon’s founder and former CEO Daniel Guasco, to discuss the challenges of bringing a well-known international brand to local shores. We also invited our followers to participate in the hour-long discussion.

The man behind the tweets

Groupon is an online shopping website offering discounted deals for everything from holiday, spa, and restaurant packages.

Guasco together with partner and co-founder Wayne Gosling started Groupon SA in June 2010 under the name Twangoo. The company was a few months later sold to Groupon USA – and became Groupon SA.

Impressively, a third of all e-commerce transactions in South Africa are on Groupon. Internationally, the company’s first-quarter revenue for 2014 was $757.6 million.

Guasco has an MBA from the University of Cape Town and previously worked for corporates such as Integrated Global Trade, Partners for Change Holdings and GEP Renewables.

E-commerce in South Africa and the world

In his Twitter interview, Guasco talked about how South Africa continues to fall behind more developed markets when it comes to e-commerce. In the US, online retail makes up 15-20% of overall sales, in South Africa that number is less than 2%. “There is a substantial opportunity and area for growth in the coming years,” he said.

On keeping up with international standards of e-commerce, Guasco said logistics remains SA’s biggest challenge, but he remains optimistic about the future.

Startup struggles

According to Guasco, one of the biggest struggles Groupon faced when it entered the South African market was gaining a foothold in the market. In 2011 when the company launched,  e-commerce had not yet taken off in SA and consumers were wary of online shopping.

Guasco bootstrapped Groupon SA into a well-known business model and started hiring staff thereafter.

Although Groupon SA specialises in products, services and travel; the e-commerce website’s most popular categories have been entertainment and food and drink.

Guasco’s advice to entrepreneurs interested in achieving similar success is to focus on how you can make money from your business idea.

Read the full #SMELiveChat discussion on Twitter.

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