Groupon - Doin' Good
Groupon, the consumer deal maker, is doing well. Its IPO was a big hit. But the business in which it is engaged still raises concerns among investors. It isn't so much the business model of Groupon itself, but rather the state of the industry and the consolidation it is going through. Also, a natural for Groupon is to venture into the mobile market, which it is trying to do. However, mobile payment systems using mobile units are needed for this and they are just not here yet. So Groupon has some issues, but it looks like a viable business both for consumers and for investors. Check out this article for more.
1 comment:
Hi Gerald:
I know I'm swimming against the tide here, but I believe the Groupon business model has some big inherent flaws. The biggest is the disconnect between buyers and merchants. Merchants are looking for loyal, relationship-type buyers (that's why they are willing to take a hit on short-term margins, in the hope of getting high life-time-value customers). Buyers, on the other hand, usually fall into the "Price-Buyer" quadrant. They are bargain hunters, and notoriously disloyal.
Until Groupon (and other like it) fixes this disconnect, their business model is vulnerable.
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