Groupon anxiety

Groupon anxiety
The online-coupon firm will have to move fast to retain its impressive lead

GROUPON has arrived in China. On March 16th the online-coupon firm’s new site there—a joint venture with Tencent, the country’s biggest internet company—began offering daily deals such as 75% off the regular price of a trip to an indoor hot-springs resort. Initial signs were that Chinese consumers will rush to snap up Groupon’s offers, as they have in many other parts of the world.

In 2009 Groupon was a virtual nobody, confined to just 30 American cities, with 120 employees, 2m subscribers and just $33m in revenues. By the end of 2010 it had become a global success, with more than 4,000 staff, 51m subscribers in 565 cities worldwide and $760m in revenues.

Yet amid all the excitement over the “world’s fastest-growing company ever”, as some have breathlessly described Groupon, words of caution can increasingly be heard. Even Andrew Mason, the firm’s habitually cheerful boss, seems to harbour doubts. “By this time next year, we will either be on our way to becoming one of the great technology brands”, he recently wrote in an internal memo, “or a cool idea by people who were out-executed and out-innovated by others.” More fundamentally, the whole idea of “daily deals” may have serious flaws

more...