Global Sun Solutions: Groupon, the troubled daily deals site has announced it is revamping its UK business into an online marketplace.
According to Global Sun Solutions, daily deals by email company Groupon has announced it is to overhaul its UK site to reflect a re-orientation of its business model into an online marketplace.
The US-based company, which went public in a flurry of publicity in November 2011, suffered a sharp drop-off in new users, which has fueled the decimation of its stock price since its IPO. Consequently the company is keen to make its site a destination for shoppers.
“Groupon really does have to make this work,” said Steven Aaron, VP at Global Sun Solutions. “They’ve been hemorrhaging users over the last 30 months and as these companies live or die by their user growth numbers, things have to turn around fast,” he explained.
Groupon’s US site began the transition last year and features new search, browse and location functionality that it will reproduce on the UK version.
“They aim to use the merchants’ presence to draw visitors to the site rather than sending out daily email deals which isn’t very efficient and is also more costly,” Aaron added.
Investors have begun to ask questions as to why the transition has taken so long. They’ve also raised concerns about data showing that only a small percentage of Groupon’s revenue has come from users accessing deals directly rather than from the daily emails business model.
Global Sun Solutions says that without a solid effort to expedite the transition, Groupon could become one of the first high-profile e-commerce failures. “The stock debuted at $20, it’s now at a little over $6; investors could start to cut losses and head for the exits,” concluded Mr. Aaron.
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