Link: Groupon’s Business is Decaying in its Established Markets
With GroupOn’s IPO fast approaching, it’s worth considering whether they are a wise investment.
The following is an in-depth analysis of Groupon’s business in one of its oldest markets, Boston, by the folks at daily deal aggregator Yipit.
The entire piece is worth reading, but for the TL;DR crowd, here is the breakdown. Groupon’s costs to acquire customers is skyrocketing, while its revenue per customer is plummeting. Along with shrinking margins and a lower number of Groupon’s sold per deal, Yipit sees serious warning signs in the company’s financials.
Disclosure: I dislike GroupOn et al. as I feel they are screwing the businesses who they convince to offer deals on the site. I just don’t think the kind of customer tempted through the door using such severely discounted vouchers is likely to return and pay full price.