Groupon SA focused on customers

2012-09-20 14:35

Cape Town - Groupon is intent on delivering customer service as it drives to become a major e-commerce player in South Africa.

The group buying site gave reporters a look behind the scenes at its operation in Cape Town and said that it was focused on customer satisfaction, even though the company is often seen as a middleman.

"That's one of the biggest challenges that we face: We're dealing with a partner with whom we entered into a legally binding agreement with the best possible intentions," joint CEO Daniel Gausco told News24.

The company said that it actively engages its users on social networks because it wasn't a traditional type of business.

Online users usually have a higher tendency to complain about poor products and service offerings on social networks and Groupon is determined to responsive on popular platforms.


"Is social media; is Facebook just a fad; is there value there? As a social commerce business, we have to be very active in engagement," co-CEO Wayne Gosling said.

The group buying site is the quickest company in history to $1bn is value, but the CEOs are more concerned with customer feedback than share price.

Groupon sells about 1 000 deals per day globally and in SA it operates in 10 cities. The company is particularly sensitive about retailers that don't adhere to the contract they have signed for consumer deals.

"If that partner is for whatever reason doesn't deliver what they agreed to then we sit with that issue; it's our customer," said Gosling.

There are about 120 staff at the Cape Town office and the company employs capacity monitors who check on retailers for compliance with the deals as well as a division to check all aspects, prior to a deal going live.

"Prior to a deal going live, we have a quality assurance team checks the details of every deal. From the product side, they'll get samples in and check that the product is actually to a standard, that it doesn't infringe on trademarks; it's of sufficient quality, sufficient stock in the country, that reviews are in place," said Gausco.


He conceded that problems with suppliers and refunds sometimes arose, but was quick to add that the company was constantly trying to improve its systems.

"We've learnt as we've gone along. We've realised we've got to be far more active in this space."

"If we don't feel that that partner is able to deal with that, despite all the checks we take, then we'll refund those customers," Gosling added.

Despite that fact that the share price of the company has tumbled over the last year, nearly erasing half its value, both CEOs rejected that suggestion that the firm was stagnating.

"I'm not too concerned about share price is or what the valuation of the business is because we've demonstrated where we're going in terms of innovation, development; growth that's positive," said Gausco.

As an example, he pointed to the eight new employees in training and said that the firm receives around 800 unsolicited phone calls a day from prospective partners, most of which are rejected.

The company said that it will take time for its marketing strategy to become accepted by mainstream marketing professionals but it has already chalked up victories and vendors don't pay upfront.


Groupon typically takes a 50% commission on sales, but Gausco said the number was negotiable.

"We have different mixes and negotiations, but it depends on the brand and the position. But ultimately, we've got to generate revenue to sustain the business."

Both Gausco and Gosling demonstrated their ambition to take on established e-commerce players in SA and moved the company to focus on travel deals.

They will also shortly launch a "store front" site that will offer products to consumers.

"Groupon wants to become the operating system for business. It's become a holistic parcel that we give to vendors," Gosling said.

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  • darin.graham.7 - 2012-09-20 15:31

    Watch out for Amazon Local Groupon.

  • alan.gernet - 2012-09-20 15:53

    I have so far been satisfied with Groupon offerings .. no probs.

  • francoise.jordaan.1 - 2012-09-20 15:57

    A couple of months ago my daughter purchased a voucher from them to use at a spa. The voucher could not be used as the Spa had underestimated the response and could not fill all the orders. Despite numerous phone calls, emails and complaints to Groupon, to this day we have not been refunded. I woill not touch them again with a bargepole!

  • francis.kilonzo.14 - 2012-09-20 16:16

    i have honestly never had a problem with Groupon voucher.. I've always had a very good experience with my family and friends... i really don't know what the BIG fuss is all about....

  • jasonwarnerza - 2012-09-20 18:20

    How is this news worthy?

  • ashley.holling.9 - 2012-09-20 20:27

    Given the last offering they made of tickets to Sexpo & playboy - their reputation in my mind is destroyed !! My letter to them earlier today attached below. I am both ashamed and appalled to have an item in my inbox and email titled "Sexxpo" and "Playboy". The reputation of Groupon has instantly been smashed - and I am sick to think that the company is prepared to stoop so low as to be in involved in an industry which degrades and abuses the beauty of a woman's body that God created for the enjoyment of a husband. I am a regular purchaser of Groupon vouchers - have bought 11 in the last year I think. However - I have no choice but to cancel everything I have to do with Groupon unless the following: - I expect a public apology from Groupon, and instant removal of this disgusting advert. Should this not take place within 1 day - I will be starting a public boycott of Groupon, as well as messages on forums such as Hellopeter. There are many people I know who have exactly the same moral values - and will immediately join in. I am embarrassed to have marketed Groupon to quite a few friends - but I will for sure be involving them in my plans. Whilst Daddy's Deals don't have the same spread of offers - I will only be too happy to rather support and market a company with scruples !!

      tammy.laumann - 2012-09-21 12:35

      Get off of your high horse.

  • juan.l.roux.5 - 2012-09-21 12:10

    Bad Bad BAd, I will refer this to Twitter and facebook, very unsatisfied and wont buy any Groupon vouchers again. Since I looged my request on the 31 August to get my refund, now it is the 21st September and still no refund. Send Two bank statements through and still nothing!!!!!!

  • nicolene.ras - 2013-01-25 13:38

    I've been a fan of Groupon for a while, bought restaurant vouchers, accommodation vouchers, all kinds. BUT THEN I MADE THE HUGE MISTAKE OF BUYING A VOUCHER FOR A PHYSICAL ITEM THAT HAD TO BE DELIVERED TO ME. I purchased an Air-o-space bed in November. It was due to be delivered before Christmas. I have been following up on a regular basis and I have been ignored flat. NO COMMUNICATION, NO PRODUCT, NO REFUND!!! I would urge people to check all the complaints on Hello Peter before taking the chance of using Groupon, it seems to be getting worse. Lately every time I send a follow-up they simply mark it "deemed solved" the next day, then I send another follow up to say, this is not solved, and the next day, same thing happened my issue is marked "deemed solved". I also left a complaint on Hello Peter 3 days ago, after numerous unsuccessful attempts to solve this matter, and I received a response saying that I should check their email response to me in order to solve this issue - needless to say, I have still not received any email communication from them. For anyone who are also having issues, leave you complaint on Hello Peter, report them to National Consumer Commission - Tel: 086 026 6786 - Fax: 086 151 5229 - and send your complaint to Carte Blanche. I think it is high time that these people be investigated. My loss currently is almost R800 that was paid immediately and I have nothing to show for it. Who protects the consumer?

  • Melvin Rajiv - 2013-07-31 13:06

    I love Groupon too, Daily deal websites and group buying sites are great idea for businesses in today’s economic trying times!

  • Melvin Rajiv - 2013-07-31 13:08

    I love to Groupon, definitely Daily deal websites are great idea for businesses in today’s economic trying times!

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