As Groupon announce today of a significant loss of over $42 Million many have been led to ask the question “Is the Groupon bubble about to burst?”. Groupon has made its name by transforming the online voucher code and offers industry spawning a range of competing sites such as Wowcher, MyCityDeal and LivingSocial. With this said things haven’t always been a bed of roses for Groupon who have faced complaints from users and participating companies alike with problems about offers, how they have been publicised or misleading claims which they have then have had to face the ASA over. As a result Groupon has also had its fair share of negative publicity with some companies blaming them for their bankruptcy when offers have gone awry. With this said are we as a society wakening up to the negatives and drawbacks of this type of voucher industry? Groupon has also been pulled up by the British Office for Fair Trading amidst claims of posting misleading vouchers and adverts as well as exaggerating saving claims on their site. In addition to this Groupon was reprimanded 48 times by the ASA last year for breaching advertising regulations and had over 60 of its adverts banned in the space of 6 months.
Groupon has been able to keep most of this controversy quite by acting to resolve these issues quickly however as all this
information now comes to light consumers may be force to think twice next time the click.
There are a number of theory’s being thrown about regarding Groupons sudden fall, whether it is a slump due to their quick growth or the fact that people are simply getting ‘bored’ and ‘frustrated’ with this type of marketing only
time will tell. Needless to say all those companies who have jumped on the bandwagon may live to regret their decision.