Groupon is extending its reach in the UK

This will see it directly compete with online players Amazon and auction service eBay

Groupon, the US deal-of-the-day web site offering discounted gift certificates for businesses, is extending its reach to the UK by offering discounts of more than 80 per cent for products sold online.

According to a report by Bloomberg, the move across the Atlantic will put the Chicago-based startup into closer competition with established online players such as retail giant Amazon and auction service eBay.

Both already have communities of online vendors who can take advantage of Groupon's services to sell their items. Groupon makes most of its revenue selling daily deals for restaurants, hotels and other merchants and has the ability to send discounts to more than 115 million email subscribers.

Amazon is a backer of Groupon rival LivingSocial, which is experimenting with similar deals.