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AmazonLocal sells 1 million gift cards in 17 hours

The online retailer's deals business posts the second fastest selling daily-deals promotion ever, in a bid to better compete with Groupon.

Amazon sold 1 million gift cards in just over 17 hours yesterday in a bid to bolster its AmazonLocal daily deals service.

The deal -- a $10 gift card selling for $5 to U.S. shoppers -- was the second fastest daily deal the industry has seen, according to Savvr, which tracks daily deals.

"The popularity of this AmazonLocal deal shows that customers want unique and relevant deals that provide them with an excellent buying experience," Amazon said in a statement.

LivingSocial holds the record for the fastest daily-deal promotion, selling 1 million Whole Foods vouchers in 14 hours last September, according to Savvr.

The deal is particularly notable because it typically costs daily deals companies such as Groupon about $5 to acquire customers, Savvr's Tim Elliott said in a blog post. That's exactly what Amazon paid. And yet it got not just a bunch of new customers, but ones that are comfortable making online purchases.

"These subscribers are substantially more valuable than a regular list subscription that may never materialize into a buying customer," Elliott wrote.

The giant online retailer debuted AmazonLocal in June. It currently offers AmazonLocal in dozens of markets across the United States, from Seattle to Miami, San Diego to Boston.