Marketing, Strategy, Technology

Is Groupon a good idea for retailers in India

Clearly, the trending topic for the week has to be groupon and its stellar IPO in many levels. The IPO which opened at $20 saw shares rise by 35% to close at $27 on the first day of listing itself. This made a lot of people millionaires and justificably so because of their hard work.

The question that a lot of folks in India are still figuring out is whether a Group Buying site is indeed good for the retailers… To quote a retailer

As a retailer who has used Groupon — as well as traditional advertising — to build my business, I’ve come to the conclusion that there’s a lot of misinformation out there. Is Groupon the worst marketing ever? Or is it the best marketing ever? Probably both. One thing is for sure: Groupon is a beast. What else would you call something that can deliver 2,000 customers to your store? It’s a beast that can propel your business or smother it. It depends on your business. It also depends on you.

Now what will it depend on in the Indian Context –

Primarily 3 factors:

1. Nature of your business and local factors – such as sector of operation , perception on discounts etc

2. Brand sensitivity – will offering a discount dent the brand in the eyes of your regular customers? It is a judgment call. I am sure that it is a bad idea in some cases.

3. Pure economics – Is the LTV of the customer good enough ? Can your giving discount to the customer the first time around help you build lasting relations with these new folks who came by to your place?

4. Average sale amount – Is the average sale amount high enough? Does the customer also buy stuff that was not included in the deal too?

Let us know your views on this.


Like what you read? Share in your network!

Leave a Reply