Have you ever heard of Groupon? If not, you either must have had your head stuck in the sand lately or none of your friend is nice enough to tell you… But either way, you probably have missed quite a few hot deals! So what is Groupon all about and why it is considered as the fastest growing online company ever?
The rapid developments of information technology and internet have witnessed the success of many on line businesses like Amazon, Ebay, Google and Facebook… Groupon is not the 1st internet retailer but the company won its impression by its fastest growth in the web based business.
What is Groupon’s secret key to success?
I think the success of Groupon lies in the following reasons:
- The business started off from the local customers’ needs and operates on a geographical base. Aiming at consumers’ frenzy about discount and the urgent desire to grab the hot deals but do not have much time and, Groupon is right there to provide them the solutions.
- Groupon differentiates itself from other big online retailers by offering quite a diversified range of product/service deals from a hardware company to a flight school. More importantly, they have built a local-city based webpage with offers and deals of the day, which provide customers great convenience.
- Despite a web-based business, Groupon do have a group of office-based people to contact with vendors. This helps with building a long term and trust relationship with its retailers/vendors – stakeholders and they therefore have a more insight, the hottest and most up to date deals to offer to customers.
- Being aware of the completion, Mason seems to have a clear plan in mind to expand his business both in the product offerings and geographically
- Mason has utilised his limited marketing budget as most small online retailers have to by marketing the company through the high profiled websites and social networks like Google, Facebook and the efficiency of words of mouths.
- Another success of Groupon is its ability to reach the break even and earn high profit, which in turn attracts more and more investors as they really want to see a high cash flow business rather than just a potential idea.
The challenge ahead
As more and more businesses imitate and start the online operations, it is obvious that Groupon is in danger of seeing its dominance eroded by the competitors. So the question is how Groupon can stay strong in the market and I think the biggest challenge is Groupon itself.
- If wishing to expand to other markets or countries, Groupon needs to undertake careful market researches, have location-based offices where they have local people who know and understand customers’ needs, who have better contacts with retailers or vendors to win the most competitive deals to have on its webpage.
- They need to develop a fully strategic business plan
- They need to build up trust with retailers and vendors and customers to keep them come back for more deals.
- To avoid replication, licensing their website content can be one of the solutions
To be successful in the online business where there are many alike companies, I think the most important 3 factors need to be considered are:
- The company must have a fully developed business plan to differentiate itself in the market, whether by product offerings or website utilisations or building strong relationship with customers
- The company must show or achieve the profits as soon as possible to attract investors
- The company must have realistic objectives. It is not just about achieving a high number of visitors but it is also about how to generate sales and revenue.
The successful Groupon has arrived in Australia in the form of stardeals.com.au. During its first week serving Sydney and Melbourne, Stardeals’ featured deals include surfing lessons, dance classes and upscale spa treatments. Stardeals do not only give consumers unbeatable deals but also offer businesses an unprecedented and effective form of marketing. The company is going to serve eight more territories in the coming months and expected to continue to expand its business.
http://www.stardeals.com.au, viewed Mar 29th 2011