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sojusucks
Joined: 31 May 2008
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 Posted: Tue Apr 12, 2011 2:22 pm Post subject: Groupon having problems in Korea |
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http://joongangdaily.joins.com/article/view.asp?aid=2934748
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Tomorrow marks the one-month anniversary since Groupon, a U.S.-based deal-of-the-day Web site, launched its service in Korea to much fanfare.
One reason behind the hype was the company�s global standing. Groupon has operations in 500 cities in 44 countries. Established as an Internet startup in 2008, the company is valued at $4.75 billion at present. Groupon made headlines last year when it rejected Google�s offer to acquire the company for a hefty price tag of $6 billion.
Another reason behind the hype was Korea�s social commerce craze. Groupon allows people to make collective purchases at cheaper prices. The discounts only kick in when a set number of people agree to make the purchase, so interested buyers usually spread the word on social media sites.
Lukewarm response?
�We will achieve 10 billion won [$8.88 million] in monthly sales within the first half of this year,� Hwang Hee-seung, CEO of Groupon Korea, ambitiously predicted at a press conference in March.
Hwang and other top Groupon Korea executives - all in their 20s - were optimistic, pledging that the company would clinch 20 percent of the local market share in the first half of the year.
Partly due to the self-imposed high expectations, some media have reported that the company is not doing as well as it should be.
Groupon Korea officials responded by saying they are satisfied with last month�s results.
One media report claimed the Web business failed to gather enough people to give discounts on many of its deals. The report said five of 11 deals offered on March 16 didn�t materialize for that reason.
The report went as far as to suggest the possibility of the Web site closing down should it fail to reverse its fortunes soon.
It wouldn�t be the first time a foreign Web site that has made it big overseas took a flop in the Korean market.
A victim includes Google, which has struggled to emerge from its puny player tag in Korea despite being a global behemoth overseas. Social networking sites MySpace and Second Life closed their Korean operations soon after entering the Korean market.
Some foreign firms, however, have been very successful. U.S.-based social networking sites Facebook and Twitter are doing surprisingly well here, aided by the explosion in the popularity of smartphones.
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sojusucks
Joined: 31 May 2008
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| Posted: Tue Apr 12, 2011 2:28 pm Post subject: |
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I have to add that the main reason I would be hesitant about using these kinds of discounts is the fact that many stores and restaurants in Korea are very bad about honoring coupons, deals, and even honoring their own advertised sales. Bait and switch is a common tactic in Korea. I'm sure I'm not the only one who has been burned by any of this, in Korea, and that includes many Korean shoppers and diners. There's just so little consumer protection in Korea that you need to be wary of deals that sound too good to be true.
If you buy something on Groupon and try to redeem it, what are the chances that you can get a restaurant or store to honor the deal? It's not 100%. Groupon may have good intentions, but this may not be the marketplace for this kind of thing. |
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PEIGUY
Joined: 28 Mar 2004
Location: Omokgyo
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| Posted: Tue Apr 12, 2011 3:42 pm Post subject: |
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| sojusucks wrote: |
I have to add that the main reason I would be hesitant about using these kinds of discounts is the fact that many stores and restaurants in Korea are very bad about honoring coupons, deals, and even honoring their own advertised sales. Bait and switch is a common tactic in Korea. I'm sure I'm not the only one who has been burned by any of this, in Korea, and that includes many Korean shoppers and diners. There's just so little consumer protection in Korea that you need to be wary of deals that sound too good to be true.
If you buy something on Groupon and try to redeem it, what are the chances that you can get a restaurant or store to honor the deal? It's not 100%. Groupon may have good intentions, but this may not be the marketplace for this kind of thing. |
Isn't their copycats out in the market here in Korea? If so, I wonder how they're doing? |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Tue Apr 12, 2011 7:08 pm Post subject: |
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There are Korean sites that do the same thing that Groupon does. They are better know to Koreans than Groupon.
As for as bait and switch, that isn't likely to happen.
I think groupon is great, except I don't make it a habit to check the site very often.
I guarantee if Groupon used one of those bigscreens in Gangnam to show their site's "deal" in a recurring AD, they'd get real popular, real fast. |
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Swampfox10mm
Joined: 24 Mar 2011
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| Posted: Tue Apr 12, 2011 7:29 pm Post subject: |
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| pkang0202 wrote: |
As for as bait and switch, that isn't likely to happen.
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Maybe not with Groupon but it sure does happen a lot here. |
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Slowmotion
Joined: 15 Aug 2009
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| Posted: Tue Apr 12, 2011 9:02 pm Post subject: |
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| Lately coupang ads are everywhere on the monitors while waiting for the subway. They are a copycat site. |
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markhan
Joined: 02 Aug 2006
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| Posted: Tue Apr 12, 2011 9:03 pm Post subject: |
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| sojusucks wrote: |
I have to add that the main reason I would be hesitant about using these kinds of discounts is the fact that many stores and restaurants in Korea are very bad about honoring coupons, deals, and even honoring their own advertised sales. Bait and switch is a common tactic in Korea. I'm sure I'm not the only one who has been burned by any of this, in Korea, and that includes many Korean shoppers and diners. There's just so little consumer protection in Korea that you need to be wary of deals that sound too good to be true.
If you buy something on Groupon and try to redeem it, what are the chances that you can get a restaurant or store to honor the deal? It's not 100%. Groupon may have good intentions, but this may not be the marketplace for this kind of thing. |
In a country where almost everyone has access to the ultra-fast internet, do you think that "bait and switch" tactic would work in Korea?
People who run private business in Korea, are deathly afraid of negative comments left by netizens (who can be very virulent). Just type in any name of restaurant and you will get many hits on that particular restaurant in Naver blog, Naver In-Knowledge, Forum, or what have you.
I have in fact used many of half coupons and although the food and services varied from poor to excellent, I have never felt that I was "being burned" In fact, I noticed that many eateries I went to, to placate the concern many patrons of using "half price coupon", went out of their ways to give a decent service.
Groupon is doing poorly for the reasons they are a late-comer into the market and offer nothing new.
Added: More importantly, most of the stores offer 50% or more discounts. They are offering deals not to make money but to raise visibility and gain positive feedback and publicity. By doing "bait and switch" they have nothing to gain but really bad publicity. |
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sallymonster
Joined: 06 Feb 2010
Location: Seattle area
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| Posted: Tue Apr 12, 2011 10:20 pm Post subject: |
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| Well, it might help if Groupon Korea had an English site. |
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crossmr
Joined: 22 Nov 2008
Location: Hwayangdong, Seoul
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| Posted: Tue Apr 12, 2011 11:20 pm Post subject: |
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| sallymonster wrote: |
| Well, it might help if Groupon Korea had an English site. |
Why?
To reach the 0.05% of the market they don't reach with a Korean only website?
I can see that having a massive impact on their business.
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sojusucks
Joined: 31 May 2008
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| Posted: Wed Apr 13, 2011 1:07 am Post subject: |
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| markhan wrote: |
| sojusucks wrote: |
I have to add that the main reason I would be hesitant about using these kinds of discounts is the fact that many stores and restaurants in Korea are very bad about honoring coupons, deals, and even honoring their own advertised sales. Bait and switch is a common tactic in Korea. I'm sure I'm not the only one who has been burned by any of this, in Korea, and that includes many Korean shoppers and diners. There's just so little consumer protection in Korea that you need to be wary of deals that sound too good to be true.
If you buy something on Groupon and try to redeem it, what are the chances that you can get a restaurant or store to honor the deal? It's not 100%. Groupon may have good intentions, but this may not be the marketplace for this kind of thing. |
In a country where almost everyone has access to the ultra-fast internet, do you think that "bait and switch" tactic would work in Korea?
People who run private business in Korea, are deathly afraid of negative comments left by netizens (who can be very virulent). Just type in any name of restaurant and you will get many hits on that particular restaurant in Naver blog, Naver In-Knowledge, Forum, or what have you.
I have in fact used many of half coupons and although the food and services varied from poor to excellent, I have never felt that I was "being burned" In fact, I noticed that many eateries I went to, to placate the concern many patrons of using "half price coupon", went out of their ways to give a decent service.
Groupon is doing poorly for the reasons they are a late-comer into the market and offer nothing new.
Added: More importantly, most of the stores offer 50% or more discounts. They are offering deals not to make money but to raise visibility and gain positive feedback and publicity. By doing "bait and switch" they have nothing to gain but really bad publicity. |
Access to high speed internet doesn't guarantee honesty from stores and restaurants. Bait and switch happens all of the time in Korea. It's where something is advertised and when you get there it's all sold out or unavailable, so the customer must choose between wasting a trip and going home empty-handed, or buying something that is more expensive. It's very common to go to a store or restaurant and have an advertised sale item unavailable. http://en.wikipedia.org/wiki/Bait_and_switch
As for acceptance of coupons, I've been burned by simple ones like the Seoul Grand Sale and Korea Pass Card. That's why I'm hesitant over using any larger discounts like a Groupon deal. |
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sojusucks
Joined: 31 May 2008
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| Posted: Wed Apr 13, 2011 1:10 am Post subject: |
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| crossmr wrote: |
| sallymonster wrote: |
| Well, it might help if Groupon Korea had an English site. |
Why?
To reach the 0.05% of the market they don't reach with a Korean only website?
I can see that having a massive impact on their business.
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It wouldn't hurt their business and it also could be a sign that they are cutting too many corners with their marketing approach. |
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chungbukdo
Joined: 22 Aug 2010
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| Posted: Wed Apr 13, 2011 2:17 am Post subject: |
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| sojusucks wrote: |
| I have to add that the main reason I would be hesitant about using these kinds of discounts is the fact that many stores and restaurants in Korea are very bad about honoring coupons, deals, and even honoring their own advertised sales. |
I've used social networking sites a lot in Korea--ticketmonster, kupong, wemakeprice, etc (not Groupon yet) and everything has worked out great.
My friend just quit his job at Samsung to work for Groupon so I hope the company does ok... |
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Burndog
Joined: 17 Feb 2008
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| Posted: Wed Apr 13, 2011 2:50 am Post subject: |
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| sojusucks wrote: |
| crossmr wrote: |
| sallymonster wrote: |
| Well, it might help if Groupon Korea had an English site. |
Why?
To reach the 0.05% of the market they don't reach with a Korean only website?
I can see that having a massive impact on their business.
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It wouldn't hurt their business and it also could be a sign that they are cutting too many corners with their marketing approach. |
I agree with SS on this one...if they had an English option they'd be tapping into the only market in Korea that their brand has any traction with! Foreigners know what Groupon is...they don't have to sell their brand to us. I would also suggest that there are plenty of businesses in Korea who manage to do alright marketing to foreigners and Koreans, rather than being narrow minded. |
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crossmr
Joined: 22 Nov 2008
Location: Hwayangdong, Seoul
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| Posted: Wed Apr 13, 2011 3:03 am Post subject: |
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| Burndog wrote: |
| sojusucks wrote: |
| crossmr wrote: |
| sallymonster wrote: |
| Well, it might help if Groupon Korea had an English site. |
Why?
To reach the 0.05% of the market they don't reach with a Korean only website?
I can see that having a massive impact on their business.
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It wouldn't hurt their business and it also could be a sign that they are cutting too many corners with their marketing approach. |
I agree with SS on this one...if they had an English option they'd be tapping into the only market in Korea that their brand has any traction with! Foreigners know what Groupon is...they don't have to sell their brand to us. I would also suggest that there are plenty of businesses in Korea who manage to do alright marketing to foreigners and Koreans, rather than being narrow minded. |
While that may be, foreigners are still a very tiny fraction of the market, and even they don't all use groupon. It's not like having an English website would suddenly make the service a raging success here. Would it hurt? No, but would it really help? who knows, but probably not in any meaningful way. While there are a great number of people around here who think they're the be all and end all, we are not a significant part of the market here and any company that caters to us is a bonus and unless they're targeting foreigners only, we're unlikely to do anything to their business at all overall. |
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sundizz
Joined: 17 Dec 2009
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| Posted: Wed Apr 13, 2011 3:09 am Post subject: |
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| Also why would we as foreigners TRY to use groupon? I already have a difficult enough time just getting a seat, or placing an order. I have no desire to try and communicate to restaurant/spa/wtv it is that I have this coupon. It'd just be a headache. |
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