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Groupon India Can Use Brand Name But Case For Groupon.in Still On; On Segments, Group Buying Model & More


Groupon India, the Indian operations of the global group buying service, which used to operate under the Crazeal brand name, till it recently rebranded itself to Groupon India and switched to a new domain – Groupon.co.in, has won the case related to the copyright and usage of the brand name, Groupon India, in the country. However, there’s another case related to the ownership of the Groupon.in domain, for which a hearing is still due. Groupon CEO, Ankur Warikoo informed MediaNama that ValueNet Ecommerce still holds the copyright for the Groupon.in domain name.

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Note that Bangalore based company, ValueNet Ecommerce, had started a daily deals site Groupon.in, and more interestingly, trademarked the brand name Groupon, in India. So Groupon was not able to get its hands on the ‘groupon.in’ domain.  However, it managed to get an ex parte ad interim injunction from the Delhi High Court, which restrained the usage of the trademark GROUPON or a variation of it. Subsequently, the defendent (Mohan Rao) initiated litigation against Groupon Inc in the district court in Bangalore, following which the Delhi High Court initiated mediation at the Delhi High Court Mediation and Conciliation Centre. So Groupon and the owners of the trademark Groupon in India (and groupon.in) are in the midst of a court case: the next hearing of the case in the Delhi High Court is on 21st January 2013.

- On traffic trends - Warikko said that it was too early to comment on traffic, and that Crazeal has a lot of SEO which is still not transferred to the Groupon.co.in domain name. Also, he informed that Groupon.com does not redirect to Groupon India, but the homepage does offer an option to users for switching to Groupon India. He said that a large number o users were not aware if Crazeal was actually a part of Groupon, but the Groupon branding will certainly help  them in associating with Groupon India and identifying it as a part of n international brand.

- On the failure of group buying model in India: Warikoo said that group buying was more of a US concept, where merchants were initially apprehensive about getting customers for deals. It was more about being a market requirement, however, in the Indian market, merchants were not used to this model, and did not need a minimum deal sales guarantee. Instead, they were happy with the promotion that they got in return. However, he did mention that some merchants still ask for a minimum number of buyers, and Groupon India offers deals with them, accordingly. He said that even in the US, Groupon’s able to sell a minimum of 200-300 deals per promotion, so the trend is changing even in that market.

- Redemption rate & Competition: Groupon India does not follow a token amount model, unlike sites such as Times Deal*, which allow customers to pay a token amount initially, and the rest at the merchant’s outlet. It follows the full price model, where customers pay for the deal even before they actually avail it. This, according to Warikoo, has allowed Groupon India to achieve an average redemption rate of 92%, since most customers who buy deals actually redeem it. He says that the token model incentivizes a deal chasing attitude, which is not good for merchants. While the full price model encourages repeat purchase, according to him. He claims that 48% customers come again within 30 days of buying a deal on the site. According to Warikoo, the Groupon does not see Times Deal’s zero token amount model as a threat.

- On segments which are doing well: In terms of local services segment, the food and beverage sub-segment comprises 48%-50% of the site’s deals business, followed by Wellness and Spa at 30%, with the remaining being heath care related deals, as per Warikoo. The other major segment is travel, where the site doesn’t offer ticket deals but city getaway packages, and the third major segment is the products segment, and the site’s focus is majorly on fashion, kitchen and lifestyle products, he added. Warikoo feels that as a deals site, Groupon’s intent is leveraging on impulse buying. Even with travel deals, the site focuses on getaways which are more implicit in nature. So the site doesn’t really compete with OTAs like Yatra, Makemytrip, Cleartrip and others, as users go to these sites when they know that they’re planning a trip, he said.

For addressing the products segment, Groupon India sources products from whole sellers, direct from brands and distributers and also from Groupon’s international stream, acting as a marketeer.

- On monétisation : Groupon India doesn’t charge anything upfront from merchants and keeps a percentage of the deal voucher.

- Quality control: Warikoo mentioned that the site curates deal and only one out of seven merchants are selected for deal tie-ups, to ensure the quality of deals.

- Mobile app: Groupon India intends to launch customer facing apps for iOS and Android by the end of the year. It will essentially enable the Indian offering on Groupon’s international app. It also plans to launch a mobile website with the app.

- On market potential: Warikoo said that the market potential was huge, and Groupon India estimates it to be in the range of $2-3 billion. The company is bullish on the growth of the deals segment in India, and doesn’t feel that it didn’t work.

*Disclosure: Times Internet Ltd (Indiatimes) is an advertiser with MediaNama