Gabby An interview with Catch of the Day co founder   Gabby LeibovichWith all the hype around group buying these days, it seems wrong that some of the pioneers in the “massive discount but only for today” space in Australia, who have been incredibly successful, are getting overshadowed by new entrants who have yet to prove themselves.

With that in mind, I recently caught up with Gabby Leibovich, co-founder of  the No.1 online department store in Australia (According to Experian Hitwise) Catch of the Day (COTD).

Now, it should be said that  COTD isn’t actually a group-buying site: it’s based on the Woot model rather than the Groupon model. The difference between the two, according to Leibovich, is “the group buying sites concentrate on experiences and fun things to do around the city. COTD is all about moving boxes and products has always been, about moving product”

And they do move product…lots of it, as you’ll soon read.

That having been said, COTD also have a sister, group-buying, site Scoopon, which takes advantage of their huge customer base and their backend platform, but you can hear all about that in the interview below:

NB: (KH) = me, (GL) = Gabby

(KH) So give me some background on you – what were you doing before COTD – what are your daily activities now – How do you and Hezi split responsibilities etc.

(GL) Prior to COTD I was involved in the Audio Visual retail industry. My daily activities now are changing as my business grows. I have been involved in everything from the early days of driving to the local post office and posting the parcels, to packing and warehousing. These days I am still the main buyer, as we are essentially a sourcing company on a very large scale, and our competitive advantage is simply having great deals that are well sourced.

I spend a lot of time each day creating new innovative marketing schemes and creating new sale concepts for COTD.

Hezi , my brother, is working full time on our new venture Scoopon.com.au, and being under 6 months old it requires a lot of tender care, but it’s already showing amazing potential.

(KH) How has growth been over the years and is growth increasing or starting to level off now?

(GL) We have been consistently growing by 100% every year for the last 3 years. I truly don’t see this slowing down for us in the 2011 financial year.

(KH) You’ve  mentioned in the past that you’re on target for $100M in revenue next financial year. Is that still the case?

(GL) Last FY (ending June 2010) we reached a revenue of approx $60M. If all goes well we are looking to cross the $100M mark for the upcoming year (ending June 2011).

(KH) In the group buying space, companies are said to be taking between 10-50% of the deal value from sellers. What are your margins like?

(GL)I would like to keep some secrets! We are profitable, possibly the most profitable privately owned ecommerce business in the country.

(KH) What effect have these new group buying sites had on your core COTD business?

(GL) None. The group buying sites concentrate on experiences and fun things to do around the city. COTD is all about moving boxes and products, and I will go so far as to mention that currently we do not have any serious competitors in our online niche (which is large volume clearance in all categories).

(KH) Speaking of group buying sites – is Scoopon a defensive play against new market entrants like Spreets/Cudo/JumpOnIt etc. or do you see the Deal a Day and Group Buying markets as being different?

(GL) The markets are completely different. Group buying is aimed primarily at females, and mainly under 30’s. That segment of the population constitutes 5% of the COTD audience, where we currently cover most demographics. We understand that the group experience buying model will be shared by 3 major players within a 6-12 month period, and we’re certain that we will be a force to be reckoned with in this space.

(KH) How is Scoopon going, BTW? What are your numbers/growth like?

(GL) We don’t divulge profitability, but we’re experiencing extremely fast growth, and we’re extremely profitable.

(KH) Are you seeing much referral traffic from COTD?

(GL) A lot of the referrals are coming from COTD currently. We are very fortunate to have such a dedicated following of over 450,000 members, and this has propelled us to the no.1 position on the Hitwise ranking for online department stores

Unlike others, we have not spent a single cent to date in marketing Scoopon and we are positioned as a leader in this space already. We have some surprises lined up too!

(KH) What are your plans going forward with Scoopon?

(GL) Growing to have an even larger slice of the market pie and having a closer co-operation with COTD.

(KH) Where are you guys working these days?

(GL) We are in the process of relocating from Mulgrave, VIC to Moorabbin, VIC. Our new warehouse is 4600m2 with beautiful spacious offices. We have added another 20 staff in the last 3 months, some to assist the ongoing growth of COTD but mostly for the Scoopon venture.

(KH) Do you have any advice for Aussie tech start-up entrepreneurs?

 (GL)  If you can’t innovate – imitate!

A massive thanks to Gabby for being as open and honest about COTD, and Scoopon, as possible and congratulations to the whole COTD team for their continued success.