Page 92 - IILMGSM Journal_Management Perspective
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nomenon that will ultimately fade away. Others attract more consumers and how to make sellers to
consider these sites to stay here for a longer period. understand their format? Will it be able to work out
Groupon evolved as pioneer in this category of group the right strategy against the imitators by making
buying websites and has expanded its business in better use of the data it collected in other markets?
around 500 markets. Regardless, the market for them They believe that Indian customers are looking for
continues to grow for the time being, Groupon is experiments online and are readily accepting some of
facing the strong competition worldwide because of the innovative deals from sellers, but how to target
the low entry barrier in this industry. But the cost of and position right product categories to them is still a
sales and marketing and expand to other markets are vital issue for them. The success of their business in
strikingly high (Robles 2012). As can be observed, India would depend on how it executes in the future
Living Social, the biggest competitors of Groupon in and how it is able to sustain itself in the competitive
US has spent nearly $2.3 million on Google market. Apart from this, there is possibility of
AdWords on June 2010 in order to maintain the entering traditional commercial companies, who have
second position in the market (Learmonth, 2010). already established a user base and sales team, in deal
After its success in many countries, Groupon has market as is followed in some other countries. In
entered in Indian market 2011 by acquiring such case, there is chance that these companies will
sosasta.com. They are also learning from the further customize deals for their user base. However,
mistakes in some other markets. Groupon is enjoying because this necessitates mammoth effort in
its first-mover advantage with fierce expansion and advertising and results in only a limited effect, this
acquisition in India. Based on this leverage, Groupon model has not become too popular (Eliason, Frezgi,
is also increasing its bargaining power against local Khan 2010).
merchants when signing contracts. This paper Groupon has made huge investments in overseas
emphasizes the various strategies vis a vis marketing, markets on offices and staff but this expansion hasn't
operations, pricing, used by Groupon to realise their paid off for Groupon outside of Europe. The
vision of group buying to the Indian customers. company has recently posted steep declines abroad.
However, the market is highly concentrated, majority Consequently, it needs to pay attention to these
of offers are concentrated on large cities. Though, the aspects, as the international market has been a
company is claiming to make a deal in almost 30 problem since its commencement. Apart from this,
seconds but it is too early to proclaim the business Groupon is facing challenges at payments front,
endeavour as successful, since it is still in its where it is facing battles with not only leader PayPal,
formative years. but also start-ups like Square, financial services
companies. Currently, Groupon's travel operations
Recommendations account is in nascent stage and is having around 5%
of sales but it could still serve to be attractive. In
Presently, some of the concerns for Groupon in India addition to buying up a small portion of a business
are- which product categories it should concentrate to that operates in this arena or an acquisition of related
91
consider these sites to stay here for a longer period. understand their format? Will it be able to work out
Groupon evolved as pioneer in this category of group the right strategy against the imitators by making
buying websites and has expanded its business in better use of the data it collected in other markets?
around 500 markets. Regardless, the market for them They believe that Indian customers are looking for
continues to grow for the time being, Groupon is experiments online and are readily accepting some of
facing the strong competition worldwide because of the innovative deals from sellers, but how to target
the low entry barrier in this industry. But the cost of and position right product categories to them is still a
sales and marketing and expand to other markets are vital issue for them. The success of their business in
strikingly high (Robles 2012). As can be observed, India would depend on how it executes in the future
Living Social, the biggest competitors of Groupon in and how it is able to sustain itself in the competitive
US has spent nearly $2.3 million on Google market. Apart from this, there is possibility of
AdWords on June 2010 in order to maintain the entering traditional commercial companies, who have
second position in the market (Learmonth, 2010). already established a user base and sales team, in deal
After its success in many countries, Groupon has market as is followed in some other countries. In
entered in Indian market 2011 by acquiring such case, there is chance that these companies will
sosasta.com. They are also learning from the further customize deals for their user base. However,
mistakes in some other markets. Groupon is enjoying because this necessitates mammoth effort in
its first-mover advantage with fierce expansion and advertising and results in only a limited effect, this
acquisition in India. Based on this leverage, Groupon model has not become too popular (Eliason, Frezgi,
is also increasing its bargaining power against local Khan 2010).
merchants when signing contracts. This paper Groupon has made huge investments in overseas
emphasizes the various strategies vis a vis marketing, markets on offices and staff but this expansion hasn't
operations, pricing, used by Groupon to realise their paid off for Groupon outside of Europe. The
vision of group buying to the Indian customers. company has recently posted steep declines abroad.
However, the market is highly concentrated, majority Consequently, it needs to pay attention to these
of offers are concentrated on large cities. Though, the aspects, as the international market has been a
company is claiming to make a deal in almost 30 problem since its commencement. Apart from this,
seconds but it is too early to proclaim the business Groupon is facing challenges at payments front,
endeavour as successful, since it is still in its where it is facing battles with not only leader PayPal,
formative years. but also start-ups like Square, financial services
companies. Currently, Groupon's travel operations
Recommendations account is in nascent stage and is having around 5%
of sales but it could still serve to be attractive. In
Presently, some of the concerns for Groupon in India addition to buying up a small portion of a business
are- which product categories it should concentrate to that operates in this arena or an acquisition of related
91
