Lastminute.com, the online provider of last minute solutions, have joined with Tourvest, the Tourism group, to launch locally as Lastminute.co.za.
Tourvest owns 74.1% of the holding company, with Lastminute.com having the option of increasing their shareholding to 50% at a later date.
Lastminute, which has satellite sites throughout Europe and an opt-in email subscriber base of 3 million, is in the business of selling products at, well, the last minute. That is, they match those companies with goods on the verge of perishing-such as airlines- with those with sudden last minute needs -businessmen, for example.
Other sectors the local site covers include accommodation, entertainment, gifts and restaurants. All sectors are fully searchable but it’s the travel sector that has the largest market, contributing up to 80% to their revenue.
The site bills itself as a tool for those who lead, or wish to lead, an exciting lifestyle. Seeing as they take a cut from every sale, it’s in their interest to prompt us consumers into leading this “spontaneous” lifestyle. Going to Cape Town for the weekend on business? Get your flight, book your hotel and maybe even get a ticket for the theatre all from within the site.
It’s this linking of products -buy a bottle of Dom Perignon and we’ll get you into Linger Longer tonight- that creates the extra value the site needs to flourish. Otherwise they may end up being disintermediated by companies offering last minute deals on their own sites.
Lastminute.com also works on a non-cancellation basis: once you’ve bought a ticket, you’re money is theirs, whatever happens in your life. And, according to Steve Griesel- CEO of Tourvest- it provides a channel for business to flog their last minute goods in a timeous fashion without diluting the market by dumping.
But Lastminute.com still has to show a profit. While they’ve grown their quarterly revenue from roughly 4 million pound sterling to just over 20 million pound sterling in a year, they’ve also grown their net loss from 6 million sterling to 11 million sterling over the same period of time.
The justification is that they’ve been expanding and will now set about consolidating, expecting profitability within two years. The local site hopes to be profitable at the end of the first year of operation, at which point they expect to have the 100,000 subscribers they believe is necessary.
In our opinion, their success will rest with their ability to brand their site as a lifestyle, not as a product. And while the suppliers they attract are important, how they communicate with consumers is even more so.