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Groupon faces fierce new competitor

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Groupon faces fierce new competitor

Amazon Local will join daily deal sites like Groupon and Living Social in the hunt for the frugal consumer.

Getty/Scott Olson

Chicago-based Groupon is facing a fierce new competitor in the group discount market. Amazon.com is launching Amazon Local and promises to save consumers 50 percent or more on daily email deals.

Amazon Local has tip-toed into six markets around the US, and Chicago is its latest hold. With more than 140 million users across the globe, Amazon Local could become the industry’s leader.

RJ Hottovy is a senior stock analyst with Morningstar. He said, “I think consumers may be more apt to open up the email or listen to the daily deal from Amazon, so it could have the potential to be a very disruptive force.”

But at the same time, Hottovy thinks the scores of copy-cat deal sites could become a bad thing for featured businesses. “I feel like the market may be nearing saturation and it’s going to be more and more difficult for rivals to have deals that stand out among consumers at this point,” he said.

And in another nerve-wracking move for established internet companies, Amazon.com, Inc. announced Thursday that it reached an agreement with NBC Universal to license and stream movies.

So now online entertainment companies Hulu and Netflix are joining Groupon in the “what exactly does this mean for us?” waiting game.

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