Despite dark clouds, Groupon’s Neoh bullish on future
By Karamjit Singh April 23, 2013
- Feels Groupon has enough going for itself to stake a strong position, especially in m-commerce
- Aims to deepen relationship with merchants; POS solution in the works
WHILE he sees three areas upon which Groupon can build a bright future, to Joel Neoh (pic), the future of the company lies squarely on how it can execute on becoming the preferred global mobile commerce merchant, especially when no company in the world has dominated the space yet.
“If you look at our Q3 results fro 2012, mobile commerce is huge for us in the United States, with over 30% of the US$568.6 million revenue coming from smartphone-originated buying – and I am not talking about tablets even,” says the international vice-president of Groupon’s Asia Pacific operations.
“So, it just makes us one of the largest mobile commerce companies around,” he claims.
Its fourth quarter results, announced in February, confirm the solid growth of mobile commerce for Groupon in North America, with nearly 40% of January 2013 transactions completed on mobile devices.
This is an increase of 44% compared to January 2012. In October 2012, about one-third of transactions were on mobile devices.
Neoh sees m-commerce as a logical extension for Groupon. And with his belief that the United States is about one to two years ahead of Asia, he is bullish of the prospects of m-commerce in this region.
For Groupon, m-commerce means a transaction that is ‘super relevant to the buyer.’
And this – being relevant to consumers – is the second big area Neoh sees Groupon playing a more meaningful role in. To the company, being relevant to its customers translates into offering them goods when and where they want them.
The strong momentum its goods business is enjoying is proof to Neoh that Groupon’s voucher-based customers trust the company and want to have a deeper relationship with it.
“What started as a supplementary business model is now a dominant part of the business and it has taken us by surprise,” he admits.
A successful holiday season end of 2012 saw Groupon Goods reaching an annual run of about US$2 billion in global billings, just five quarters after its launch.
Neoh points to the various acquisitions that Groupon has made in recent times to strengthen its positioning in the areas it hopes to deepen its influence in. Last December, it acquired CommerceInterface, for an undisclosed sum, to improve the operations of its e-commerce business globally.
CommerceInterface provides a web-based platform designed to help manufacturers, distributors and retailers facilitate online sales, interact with vendors and manage their operations. Groupon has been using CommerceInterface in its e-commerce business since April, 2012.
The third direction he sees for Groupon is the company’s attempts to deepen its relationship with merchants. It has a strong base of merchants. Its financials reveal that as of the end of the fourth quarter 2012, the number of active deals in North America increased almost 300% year-over-year to nearly 37,000.
Last May it acquired Breadcrumb, a company with fewer than 10 employees that was building a point-of-sale solution for the iPad.
“We can leverage on our relationship with merchants to help drive more business for them. This solution gives them a built-in POS/ CRM (point of sales/ customer relationship management) solution tied to their Groupon account,” says Neoh.
Another acquisition sees Groupon making reservations for restaurants, with a commission for each customer, thus freeing the F&B outlets to focus on more important things.
While all these are based in the United States for now, Neoh sees them being offered to the rest of the world within 18 months. For instance, in Malaysia he sees “huge potential” for m-commerce and wants to position Groupon as the platform.
One of the ways he hopes to do this is via partnerships to expose the Groupon brand, and cites the Maybank2U.com partnership.
Digital News Asia understands that a relationship with leading telcos Celcom and Maxis is on the cards too, thus giving Groupon a platform to market its goods to a combined database of 25 million. Neoh however declines to comment on this development.
Previous Story: Joel Neoh’s meteoric rise in Groupon: What now?
For more technology news and the latest updates, follow @dnewsasia on Twitter or Like us on Facebook.