Groupon is a global e-commerce marketplace connecting millions of subscribers with local
merchants by offering activities, travel, goods and services in more than 45 countries.
Groupon was launched in November 2008, and the first market for Groupon was Chicago,
followed soon thereafter by Boston, New York City, and Toronto. By October 2010 Groupon
served more than 150 markets North America and 100 markets in Europe, Asia, and South
America, and had 35 million registered users. By the end of March 2015, Groupon served
more than 500 markets worldwide, nearly 48.1 million active customers and featured more
than 425,000 active deals globally.
The idea for Groupon was created by now-ousted CEO and Pittsburgh native Andrew Mason.
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Additional investor concern
arose after the company restated 2011 revenues downward in March 2012.
Groupon outgrew the campaign website ThePoint.com in November 2008. Its name blends
“group” and “coupon”. Groupon's first deal was a half-price offer for pizzas for the restaurant
on the first floor of its building in Chicago.
When it first launched, the company offered one "Groupon" per day in each of the markets it
served. The Groupon worked as an assurance contract using ThePoint's platform: if a certain
number of people signed up for the offer, then the deal became available to all;if the
predetermined minimum was not met, no one got the deal that day. This reduces risk for
retailers, who can treat the coupons as quantity discounts as well as sales promotion tools. In
the early years before revenue splits began to adjust as necessary, Groupon made money
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There are certain businesses to which Groupon initially did not offer its services,
including shooting ranges and strip clubs; however, shooting ranges have been featured on
Groupon.
Unlike classified advertising, the merchant does not pay any upfront cost to participate:
Consumers are able to search and browse deals via web or mobile and can subscribe to
receive emails featuring deals they are interested in based on preferences they input.
There are potential problems with the business model. For example, a successful deal could
temporarily swamp a small business with too many customers, risking a possibility that
customers will be dissatisfied, or that there won't be enough product to meet the demand.[9]
Gap, a large clothing retailer, was able to handle 445,000 coupons in a national deal
(although it experienced server problems at one point), but a smaller business could become
suddenly flooded with customers. One coffee shop in Portland, Oregon struggled with an
increase in customers for three months, when it sold close to 1,000 Groupons on the one day
it was offered, according to one report. In response to similar problems, Groupon