Offerium Is The Finnish Groupon. But Will It Work?

A US based startup Groupon offers users deep discounts on products and services from local businesses, but you need a minimum number of users to sign-up into a deal before getting the discount. And you have only one day to do this. TechCrunch knows that Groupon is on track to generate $100 million in gross merchandise sales in 2010 of which they take a 30%-50% cut. That sounds like a real business.

Now Offerium has opened its doors in Finland. In short, Offerium is a localization of the Groupon concept. The founder of the company, Oskari Lehtonen, was running MyButler before founding Offerium. MyButler asked users what they are interested in and then negotiated two-for-the-price-of-one deals from the given advertisers for the users.

MyButler did not take off as well as was hoped for and now Offerium, the 2.0 version of the service that heavily borrows from Groupon, is poised to do better. Each week Offerium publishes a certain number of offers on its site which stay active for ‘some days’. In addition, the users can request the offers they’d like to see and after a certain threshold of users requesting the given offer, Offerium will talk to the advertiser about the possibility. Currently, Offerium has a deal with the Finnish tabloid Ilta-Sanomat to get visibility for its offers.

Offerium is not able to use the group dynamic to the extent Groupon does; namely to make all the deals conditional and to be only activated once a certain number of people sign up for them. This would make the service viral and allow advertisers making the offer to quickly gain lots of new customers and move inventory. The Offerium team is probably still tweaking the model, but it’s anybody’s guess whether Finland is a big enough market to get the service to generate big enough volumes and real revenue. A geographic handicap that I end up thinking of way too often when looking at the different services that have sprung up here in the Nordics.

Groupon, valued at $280 million, took off like a wildfire in the US (And there are myriad of others following its success). Offerium clearly has the concept, but it remains to be seen whether it has the market.