Now the online deals major wants to expand its reach in India by setting up a center for technical excellence, which will support global operations. Sachin Kapur – CMO, Groupon India – is responsible for building online brands, marketing strategy and execution of programs at Groupon. For an effective brand building process, communication with consumers in an honest and transparent manner is the keystone which Kapur swears by. An avid reader and an ardent cricket fan, Kapur shares his perspective with 4Ps B&M on how Groupon has emerged as the leading daily-deals website in India by successfully tapping into the opportunity presented by the growth of online commerce and how it is ratcheting up sales by building up demand and excitement in the coupon business.
What has been the effect of the current economic slowdown on the business of group buying and discount sites such as Groupon? Is the category also experiencing symptoms of consumer withdrawal or is consumer traction keeping up?
Daily deal websites are India’s fastest growing web vertical. The coupon business is 16.5% of the total e-commerce audience in India, growing at the rate of 629% annually with 7.6 million unique users a month. This shows that Indian consumers who were earlier apprehensive about shopping online are now browsing more often for high-value purchases and availing of experiential offers.
Isn’t experiential offers, known for qualities of touch & feel and check & try the products before purchasing, difficult to replicate for online shopping sites. How do you deal with the buying behaviour of Indian consumers still rooted in their experience of traditional shopping?
Groupon is not a deals newspaper. Each day we recommend our users one very interesting and different experience. These include local services like those offered by restaurants, pubs; health & wellness options offered by gyms and spas, which include liposuction, slimming packages and many more. In products we specialize in home and fashion segments. We even have travel deals but our main forte is weekend getaways that help busy professionals take a quick break from their busy schedules.
In the past, we have run exciting deals, including an exclusive helicopter ride @Rs.2,500 in Bangalore, Nirula’s Hot Chocolate Fudge @Rs.49, Laser eye surgery with one of the renowned eye specialists based in Bangalore amongst others. We recently ran a larger than life raffle, where a trip to Las Vegas was sponsored by Groupon for two. We will continue to incite consumers with our experiential marketing campaigns and unique deals.
But with a plethora of group buying and discount sites angling for the online consumer, how successful has been your business model in India so far?
We entered the market in 2011 and have grown tremendously to reach the No.1 rank in the daily deals category (as per ComScore data). We have seen a lot of traction from customers and our repeat purchase rate is upwards of 45%. Additionally, we are recognized as the best destination for high quality deals by our consumers, which is a fantastic achievement in just 12 months. We have attained this mark within one year of our existence in India because of the deal quality. Over the past 12 months, the site has done more than15,000 deals and has sold more than five lakh deal vouchers. We have worked with more than 5,000 unique merchants across the country, selling a voucher once every 33 seconds.
Is Groupon profitable? What are you expansion plans in India?
Being a publicly listed company we cannot share country-specific numbers. Our investor website has complete details on our global financials. We do plan to launch a center for technical excellence in India soon. This will be based out of Chennai and will support our global operations.
Who are your major competitors in India and what differentiates Groupon from rest of the lot in the same business?
We own the local-commerce space so the real competition for Groupon is not the other e-tailing and e-commerce websites. The competition for Groupon is internal and comes from Groupon sites in other countries. We believe we have to be better than the best.
Considering your growth in the country, it doesn’t look that you faced the kind of issues that latecomers usually have to take on?
That we were a late entrant in the market meant that there were a lot of players who had touched multiple consumers before us. More important, some of these players had no quality control processes in place, resulting in horrible customer experiences. This is one place where it gets very difficult to convince those consumers to try a new brand. It takes significant time and marketing dollars to win back customers’ faith.
Internet growth and the concomitant rise in e-commerce has changed the way of business marketing. How would you describe this change and where do you see it heading in the future?
The marketing scenario has undergone a phenomenal change over the last few years. Gone are the days when you could have a monologue; today you need to customize your communication to the medium and TG you are talking to. We are seeing a significant shift in the way brands are speaking to customers. Today, various elements of communication such as content, social, search, and email have come together and play an integral role in consumers’ lives. This brings the best of the Internet – information, entertainment, and conversation – to everyday situations, adding a layer of ‘augmented utility’ to our daily lives. The future of marketing is about attracting consumers to your brand through stories and valuable content. Today you have to strike a conversation with the customer and you have to be open and transparent about your product/service. The future of marketing lies in utilizing and understanding the ever-evolving connected world where every action is monitored and any customer has the power to stand up and ensure that he/she gets complete value for every penny spent.
What has been Groupon’s communication philosophy in India and how effective has it been in bringing more customers to your platform?
We believe that the best way to communicate with a customer is to have a conversation, rather than bombard him with complicated communication. Humour is one of the many ways to give the brand a very approachable and friendly character so that consumers find it easy to strike a conversation. Thus, our communication philosophy is not being serious or formal. This implies to the deals we put forward on the site as well as in our advertising. The result is clutter-breaking non-complicated messaging that
