In a quick Twitter message this week Groupon claimed that has saved it users an amount of $1bn with its extensive range of local discount offers all over the world.
Discounts on Groupon are substantial, easily around the 50% discount range and considering the company’s size and scope an aggregate ‘savings’ amount of £1bn is by no means unbelievable. The amounts saved on deals is for the most part genuine, with deals often being very comprehensive in their scope and not requiring further purchases to attain the discount. (The notorious ‘service charge not included’ fine print is an exception as the service charge is charged on the full value of the service, not the discounted value.)
It does seem as if discount buying is a growing business, considering the number of copycat services that has been appearing all over the web. Also, Groupon was recently offered a rumored $6bn by Google in an acquisition attempt but the company walked away, going on to raise almost $1bn in capital.
The company operates in over 150 cities in the world and allows sellers in a particular city such as restaurants and beauty parlors to put a limited offer forward for Groupon’s subscribers. These offers last only 24 hours so there is a bit of buying pressure which probably contributes to the success of Groupon. In addition there is only one ‘main’ offer and one ‘extra’ offer per day so users are not overwhelmed by masses of possibly dubious discounted offers.