Groupon, Inc. at a Glance

Uppers

  • Flexible work environment
  • Good compensation

Downers

  • Rapid growth has created instability and dissatisfaction
  • Increasing competition from rival firms

The Bottom Line

  • Groupon's rapid growth has made it one of the best-known companies on the web, but has also brought growing pains and questions about the long-term viability of its business model.

About Groupon, Inc.

Savvy consumers get their coupon on with Groupon. Tapping into the power of collective buying, the company helps businesses attract customers by offering them a unique way to save on things to eat, see, and do in almost 25 countries. Groupon's customers access the company's online local commerce marketplaces through mobile applications and websites, which primarily consist of localized groupon.com sites in countries throughout the world. Goods are sold across multiple product lines, including electronics, sporting goods, jewelry, toys, household items, and apparel. Established in 2008, Groupon also sells merchandise inventory directly to customers.

Operations

Selling merchandise directly to customers accounts for nearly 60% of Groupon's net sales, while selling vouchers through its online local marketplaces with a third-party merchant accounts for 40%.

Groupon offers goods and services across three primary categories: Groupon Goods (Goods), Local Deals (Local), and Groupon Getaways (Travel).

Goods offers deals on merchandise across multiple product lines, including electronics, sporting goods, jewelry, toys, household items, and apparel.

Local includes offerings from local and national merchants, as well as local events. It comprise of multiple subcategories, including events and activities, beauty and spa, health and fitness, food and drink, home and garden and automotive. It also offer deals on concerts, sports, theater and other live entertainment events.

Through Travel, Groupon features travel offers at both discounted and market rates, including hotels, airfare and package deals, covering both domestic and international travel.

Geographic Reach

Groupon has reduced its global footprint from 47 countries to 24 countries to focus its business on 15 core countries it believes have the greatest growth potential. North America is Groupon's largest market, accounting for about 70% of net sales. The EMEA region is its second largest market, generating some 25%.

Sales and Marketing

Groupon's customers access the company's online local commerce marketplaces through mobile applications and websites, which primarily consist of localized groupon.com sites in countries throughout the world.

The company use a variety of marketing channels to make customers aware of the deal offerings on mobile and web platforms, including search engines, through search engine optimization marketing, email, affiliate channels, display advertising, and offline marketing.

Within its Goods category, Groupon earns direct revenue from transactions in which it sell merchandise inventory directly to customers, in addition to third-party revenue from transactions in which it acts as a marketing agent and sell vouchers that can be redeemed for products for a third-party merchant.

Financial Performance

Groupon's revenues have remained consistent the last three years, hovering around the $3.2 billion mark from 2014 to 2016. During 2016, it experienced a 5% bump in revenue from merchandise sold directly to customers.

This growth for 2016 was offset by a decline of $63 million related to countries that it operated in during the prior year and have subsequently exited as part of its restructuring plan. It also experienced declines due to divestitures in India, Russia, Indonesia, and Malaysia.

After posting $21 million in net income for 2015, Group suffered a net loss of $195 million in 2016 due to higher restructuring charges, foreign currency losses, and acquisition-related expenses.

Strategy

To attract additional consumers and better compete with high-tech rivals, Groupon continues to invest in mobile technology. Its current mobile platform consists of apps and mobile websites that can be used via iPhones, iPads, Android, Blackberry, and Windows devices. By late 2016, more than 145 million people had downloaded its mobile applications worldwide, and more than 60% of its global transactions were completed on mobile devices.

In the past, Groupon's international operations have eroded the company's profits significantly due to higher marketing and promotion expenses. As a result, Groupon reduced its global footprint from nearly 50 countries to 24 countries in 2016 and 2017 to focus its business on 15 core countries it believes have the greatest growth potential.

Mergers and Acquisitions

Groupon has sustained slow-to-marginal growth by acquiring competitors and purchasing businesses with expertise in online and mobile applications. It acquired one-time fierce rival Living Social, an e-commerce company that connects merchants to consumers by offering goods and services, generally at a discount, in late 2016. The acquisition expanded its customer base and removed a rival from its competitive landscape.

In 2015, the company acquired Seattle-based Venuelabs, a start-up that helped local retailers monitor discussions about their brands on a variety of social networks. Venuelabs' technology helps Groupon to map out and link local commerce by bringing millions of additional merchants to Groupon and connecting them with its large community of mobile users through a dedicated presence in its marketplace.

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Groupon, Inc.

600 W Chicago Ave Ste 400
Chicago, IL 60654-2067
Phone: 1 (312) 334-1579

Stats

  • Employer Type: Public
  • Stock Symbol: GRPN
  • Stock Exchange: NASDAQ
  • CEO: Rich Williams
  • Chairman: Eric P. Lefkofsky
  • CEO: Rich Williams
  • 2016 Employees: 8,323

Major Office Locations

  • Chicago, IL

Other Locations

  • Palo Alto, CA
  • Hebron, KY
  • Bruxelles, Belgium
  • Montréal, Canada
  • Fukuoka, Japan
  • Hiroshima, Japan
  • Kumamoto, Japan
  • Nagoya, Japan
  • Osaka, Japan
  • Sapporo, Japan
  • Sendai, Japan
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