Business Standard

Groupon India tries to make the best of Snapdeals slot

Read more on:    Crazeal | Groupon | Ankur Warikoo | Kunal Bahl | Taggle.com
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, the India unit of Nasdaq-listed American daily deal site , is like the last man standing in the online format its parent popularised in the US, its chief executive told Business Standard. He was referring to the industry leader in daily deals, Snapdeal, changing its business model recently to turn itself into an e-commerce company, allowing Crazeal to occupy the top slot. Crazeal (for crazy deals) cannot use the Groupon name in India due to domain name litigation, but is hopeful of doing so sometime in the future.

Snapdeal chief executive had recently told this newspaper Snapdeal was an e-commerce company, not a deal site. The company made the transition a few months earlier to expand its horizon and focus on a range of products and categories.

Without naming the competition, Warikoo said three deal sites had gone under in the past three months. According to industry information, , Dealivore and Vamoose are among Indian deal sites that decided to wind up businesses in their current avatars. However, a few pure deal sites are still going strong in the Indian market, Deals & You and Mydala being the notable ones.

STRIKING A DEAL
Groupon, a popular coupon site in the US, is in India as Crazeal, a site which offers deals. Here is what the competition looks like
* Snapdeal, which used to be the leading deal site in India, turned into an e-commerce company recently
* Deal sites which folded up included Taggle.com, Dealivore and Vamoose Vacations
* Deal sites going strong include Dealsandyou.com and Mydala
Who buys what on Crazeal
51% buy food & beverage items 11% buy fashion products
20% spa/salon treatments 9% buy travel packages
* In revenue terms, the maximum (30%) comes from the F&B category
* While F&B is top of the charts in Bangalore, Delhi, Hyderabad, Pune and Kolkata, Mumbaikars opt for spa as the top choice
* ‘Unreal’ deals bought on the Crazeal site include helicopter ride, real estate and laser eye treatment 
Source: Industry, Crazeal

Despite their share of controversy and investor scrutiny, daily deal sites like Groupon, which use collective buying power to offer huge discounts to consumers, have many takers. Recently, Crazeal was able to sell as many as 23 laser eye-correction deals in just five days, Warikoo said. Treatment for Rs 40,000 was being sold for Rs 20,000! Other out-of-the-box deals popular on the site are a 10-minute helicopter ride over the city of Bangalore, an aerial Ganapati Visarjan trip in Mumbai and a short Valentine’s Day party in the sky. A cruise dinner is another “unreal” deal bought on Crazeal.

An in-house survey shows the site gets the most revenue—as much as 30 per cent—from food and beverages deals, followed by spa and healthcare services, and travel and hotel packages . In terms of volume, about 51 per cent of its customers opt for food and beverages deals, 20 per cent for spa and salon ones, 11 per cent for fashion products and nine per cent choose travel and hotel packages. Though the site does not sell standalone air ticket deals, it often packages these with deals for hotels etc. “We are like bestselling agents for most hotels,” Warikoo points out.

Launched in October 2011 in India, Crazeal operates in 78 cities across the country. Groupon acquired SoSasta.com in India in January 2011, before rebranding itself as Crazeal. What differentiates Crazeal/Groupon from the rest? “We recognise this market is all about merchants, not customers. Customers love you because of merchants,” says Warikoo.

Warikoo refuses any comment on the controversy linked to Groupon’s alleged non-disclosure of adequate information during its initial public offering in November 2011 and the subsequent losses in its first earnings release. He, however, says, “We, as a company, have made mistakes and then rectified these.”

The company did not share its financials, though Warikoo said the India market had potential for future growth. While the US and the UK are the biggest contributors to Groupon’s global business, Japan is the most significant player for the company in Asia. Malaysia is also growing well, while China was emerging, he said.

On merchant complaints on deals not yielding promised results, Warikoo said, “In 12 months, there’s been one such case.” Fighting competition in the short term was the biggest challenge for the company, he added. Also, opposition from merchants who didn’t understand the format was a hurdle. Of about 35 merchant deal offers Crazeal receives everyday, it accepts an average of just one or two.

Emphatic that “we are not an online retail store, but a marketing platform”, Warikoo says the company must become the preferred option for local e-commerce. And, there’s much catching up to do, as “India is the youngest country in the Groupon family.”

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