Serving over 250 markets all over North America, Europe, Asia and South America with a whopping 35 million registered users by 2010, Groupon’s fame and fortune grew so rapidly that they were able to turn down a $6 billion acquisition offer from Google in early December 2010. With its launch in November 2008, Groupon began its operation as a commission-based middleman service, bringing day-of-the-deal discounts to consumers and consumers to local businesses’ doorsteps. Groupon’s unbeatable electronic coupons commonly offer 40% to 60% off on shopping, restaurants, fitness, travel, beauty, holiday gifts, and more. To ensure profit for the sellers, discount services and commission payments to Groupon are only provided as long as Groupon meets an X number of predetermined sales per day. But more often than not, Groupon manages to exceed their promised quota of daily customers, creating a win-win situation for all three parties.
So what makes Groupon so popular? Two main factors play a role: 1) modern, motivated consumers and 2) the quick spread of information on the Internet. Modern consumers love to spend money, especially where there is discount. In the era of online shopping, Groupon’s constant online bargain deals appeal to its motivated consumers. The Internet also provides a space for information to go viral in a matter of minutes and hours. With the heavy usage of social media and email marketing, consumers are able to quickly share and spread Groupon’s daily deals to friends, family, and their social networks. On top of that, coupons are only available for 24 to 72 hours, urging customers to act quickly and snag the deal within the next day or two. These incentive strategies and more helped Groupon become the multi-billion dollar company that it is today. Learn more about its rise–and potential fall–in the following infographic.
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