Chicago based daily deals and coupons marketplace Groupon, has spun off its Indian arm Groupon India, and will now hold only a minority stake in the company. Groupon India will be renamed as Nearbuy starting from Monday with a massive 100 crore from Sequoia India already secured earlier this year.
Top executives of Groupon India, including Ankur Warikoo and Sumeet Kapur will continue to hold their CEO and CFO positions respectively.
India is a massive market and requires attention that Groupon can’t do as part of its 48-country portfolio,
said Ankur Warikoo, CEO of Groupon India.
They feel the path (Groupon) India will follow to become a leader in local commerce may not be one that Groupon follows globally.
As per Warikoo, the company has 50% market share in coupon market and sold over seven million vouchers last year in India. The new company will have a new website, mobile app and corporate logo and will focus more on mobile app market given the fact that their 60% traffic and 40% business comes from mobile devices.
Moreover, considering how Flipkart and Myntra, the two market leaders n their respective market segments are already set to promote an app-only move, it makes sense for GroupOn to focus on mobile customers more.
In addition to it, the company is planning to expand its operations to 30 more cities from the current 12 cities with more focus on delivering local services such as laundry, home cleaning, auto repairs and pest control to customers through tie-ups with third-party providers.
The strategy is not new as many of the current e commerce players mainly Snapdeal and Koovs started off as a coupons and deals providers and later diversified themselves to e commerce marketplace owing to the demands. Something similar might be brewing up within
GroupOn India Nearbuy as well.
On the other hand, for the global Groupon, this latest development comes after merely three months since Groupon sold off its controlling stake in a large mobile commerce company called Ticket Monster based in South Korea worth $360 million and is a clear indicator of the tough times Groupon, and the whole coupons market is facing.
Founded in 2008 and currently operating in 500 markets and 48 countries across the world, Groupon has reported consistent losses since it went public in 2011. For instance, compared to 2011, its share value has plummeted to $5 a share from 26$ a share thereby decreasing by 42% on year-to date basis.
Consequently Groupon has been lately trying to establish itself as a more broad marketplace in US as well as selling off its stakes in some entities. The company had already said in March that they were looking for various options including selling its online shopping platform Ticket Monster in South Korea and businesses in “certain other Asian markets.”
On the recent developments and their decision to decrease their stake in Groupon India, CEO and co-founder of Groupon Eric Lefkofsky said,
Nearbuy is well positioned to lead the dynamic Indian local commerce market. As a continued shareholder in the business, Groupon looks forward to see Nearbuy achieve its vision to become the leading local commerce company in India.