Is this another Ferrit?

There have been a lot of TV ads promoting Lasoo.co.nz, a price comparison pre-shopping website.

I remember all too well Telecom’s foray into the online shopping experience. Now NZ Post, along with Reachmedia which it owns 50% of, is having a crack at this market.

Let me predict right now – this is destined for failure, in New Zealand at least.

Ferrit collapsed in January 2009. It was also a price comparison website but with the difference that customers could buy directly from the site. Lasoo sends customers to the nearest store or website of the retailer. So it would seem that the only way that Lasoo is making money is by charging retailers for the activity that their products generate on the site, and from Google ads.

It’s not going to work for a number of reasons:

  1. New Zealand is too small a market
  2. There aren’t enough retailers offering the same product to make price comparisons worthwhile

Only nine retailers have signed up but┬áReachmedia chief executive Greg Radford says it expects to bring about 10 more on board in the next few months. That’s a projected total of 19 retailers presumably offering different products with minimal ability to compare prices. If all nineteen stores offered the same products then the game may be on.

Lasoo has been operating in Australia for nearly two and a half years with some success. But that market is a lot bigger than New Zealand. As Stephan Korn, director of Webfund says in this Stuff article – “the site will be difficult to make a go of in New Zealand. It will need to charge retailers a ‘low cost per 1000 impressions’ rate to get their buy-in so they will need huge traffic to make it work.”

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  • By Stu, July 15, 2010 @ 9:12 am

    Thanks for the link – it actually looks really nice..

    These comparison sites are very popular in other countries esp. the UK, so why not NZ? I tend to use PriceSpy at the moment and that still has more of a range. But once Lassoo gets more retailers on board – then I’ve got 2 places to look before shopping.

    Don’t buy into the Tall Poppy Syndrome Skinny – theres precious little innovation coming out NZ as it is.

  • By Skinny, July 15, 2010 @ 1:45 pm

    Is this Stu, ex Intergen? If it is how are you?

    The reason these comparison sites work in places like the UK is that there are many more millions of customers and thousands more retailers.

    With regards to Tall Poppy Syndrome I’m always keen to see innovation – this is a rehash of an idea that has been in the marketplace for years. As you say PriceSpy is a popular site, and it does it well and in a very agnostic way.

    Just my two cents worth.

    Thanks for leaving the comment :-)

  • By Stu, July 22, 2010 @ 10:35 am

    Yep same Stu. Things are great – would be good to catch up for a beer sometime!

    Agree with your points – but I think TradeMe has shown that a smaller market != unsuccessful.

    As for innovation, yes the broad concept is fairly old but theres small touches of innovation in there – clicking through a catalogue and being able to zoom in on products (not just jpgs) seems fresh.

    Even it doesnt do well I’m sure the team behind will have learnt a few things an maybe something worthwhile will rise from its ashes. Sort of like Action This/Aptimize…

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