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Is Groupon sustainable?.

The author

Epiphany Search

Mashable has produced a cool infographic which shows the rise and inevitable fall of Groupon.  It provides a brief history on the business and how it evolved, along with some facts and figures on growth and revenue.  You can see the infographic here. Since Groupon launched in 2008 it has grown from a little local brand to an international phenomenon.  Google recently offered Groupon $6 billion to acquire the successful business but Groupon declined, and have since managed to raise $950 million in Series G Funding.

But is their success sustainable or are they just capitalizing on what could be a fad? The Wall Street Journal posted an interesting article which questioned the sustainability of the Groupon business model.   They explained that even though Google made an offer of $6 billion, they still had some concerns about the prospects of Groupon. The issue of entering smaller markets would be personnel intensive and become less profitable. Some of the key businesses that regularly supply offers may introduce more restrictions on their offers, and the continued growth may lead to new businesses providing low quality offers. Groupon has no control over the customer service provided by the vendors which could discourage customers from returning to purchase other offers in the future. It has only really taken off in the UK over the last year so is still a novelty.  There are a number of people in our office that have purchased Groupon offers and monitor them on a daily basis.  I personally have only bought one offer but I don’t see any reason why people would stop using Groupon. There will always be certain offers that appeal to individuals and with such great discounts, why wouldn’t you buy them? I can see that if vendors were to introduce more restrictions it may prevent people from purchasing the offers, but would this really become a problem when they are currently selling so well?  If vendors did start to see a decline in the take up of their offers, then surely this would be a bad thing for them and something they would look to resolve as soon as possible. As the business expands there are certain to be more vendors but it doesn’t necessarily mean that the quality of the offers will be lower.  Currently the quality of the offers range and it will continue to do so in the future. The customer service of the vendors cannot be controlled by Groupon but if I was to have a bad experience with a business and their particular offer, I would take it up with the business and not Groupon.  It wouldn’t stop me from purchasing another offer with a different business/vendor. In summary, I can see that Groupon is still a very young company and needs to prove its sustainability but I don’t think it is a fad.  If they continue to provide great offers on activities and services that appeal to people, then there is no reason they should fail in the future.