Pioneering the deal-of-the-day market, Groupon are arguably market leaders in providing purchase incentives such as money-saving offers for consumers across the globe.
Early successes came from the company giving away half-price vouchers for a pizza restaurant based on the ground floor of their head office building, though this has since developed into highly-localized promotions for regions in 150 markets worldwide.
In exchange for using the Groupon platform to market their products, third party vendors offer their services at a reduced price and are obliged to give the company a cut of the fee. The most common companies to use Groupon are generally small, independent businesses – such as local restaurants, masseurs and hotels.
Deriving its name from the term ‘group coupon’, Groupon was at one time predicted to be the quickest business to ever earn $1 billion in revenue – however, the growth of competition from the likes of Livingsocial and KGB deals – teamed with public indifference for many of the promotions offered – has meant consumer uptake has slowed down somewhat.
In an attempt to stop the heavy losses being incurred by the company (with an estimated $10 million shortfall in their 2013 accounts), Groupon have recently started attempts at diversification. This has included the launch of Groupon VIP (which provides members with early access to deals) and Groupon Now (an app that provides instant offers dependent on the users’ needs).