ICD and partner launch online coupon service
Jamaica's ICD Group is partnering with Puerto Rican company Social Media Group LLC as an investor in Gustazos.com, which will sell deals from an online platform to Jamaican consumers first and then others in the English-speaking Caribbean.
Translated to English, Gustazos means 'guilty pleasure'. It is essentially an online coupon service, in the vein of Groupon. The investment will be ICD's first e-commerce venture, as well as Social Media's first venture outside of Spanish-speaking territories. The site went live in Jamaica this month.
ICD is a joint-venture partner in Gustazos, with responsibility for the roll-out of the service in Jamaica, as well as marketing, administrative, accounting and IT services, but Chairman Joseph M. Matalon declined comment on just how much ICD is investing in the venture.
The partners have a revenue-sharing arrangement.
To be successful, the service will require buy-in from merchants, but, here again, Matalon was unwilling to speak to the fee arrangements in place.
Gustazos Jamaica operates from ICD's headquarters in downtown Kingston. From early as 2013, there was talk that Gustazos had entered Jamaica, but ICD Chief Operating Officer Vikram Dhiman who is overseeing the Jamaican roll-out, said what happened then was a market test, and that since then Social Media Group had been seeking a local partner. Talks with ICD began in 2014. Expansion to other Caribbean markets is being targeted for early 2016.
Matalon said the coupon service is hoping to realise in the medium-term about one-tenth of the revenue earned by the Puerto Rican operation, which saw turnover "in excess of US$20 million" last year.
"The concept of Gustazos Jamaica is simple - providing people with an easy-to-navigate website that publishes daily deals offering price discounts from 50 per cent to 90 per cent at partner restaurants, hotels, attractions, spas, shops and other merchants. Merchants are able to market their business to a wide local audience and provide an incentive for people to try out their new offerings, products and service," ICD said in a release on the new service.
"The model is to help grow people's business", Matalon told the Financial Gleaner, saying that the site would offer deals from restaurant meals to hotel rooms, allowing companies to utilise "excess capacity".
He cited the example of F&B Downtown, a restaurant, which is one of the first companies listed by Gustazos and which up to Thursday had sold 42 two-person meals for $1,499. The meals had a discount of 50 per cent discount off the standard price of $3,000.
The very first deal for shoe company D'Next Step closed in hours, said Matalon, with all items on offer sold out. The second deal that also sold out was 500 coupons for Ocho Rios's Wata Land Jamaica Park. Payments for deals are made by international credit card or Visa debit.
There is no charge to consumers, except what they pay for the goods or services bought.
Globally, Gustazos has completed over 1.5 million transactions since its launch three years ago with total value of J$12 billion, the companies said.
Dhiman told the Financial Gleaner that the company will initially target three new deals a week, growing to six weekly later in the year. Since start up, six companies have offered deals on the site.