Ecommerce Model of Groupon
1. Introduction
As dynamic pricing mechanism been introduced, buyers and sellers can negotiate product prices in the market as well as the e-commerce market. Group-buying was appeared in the mid-1990s, and been popular in recent ten years as a business-to-consumer (B2C) transaction. Group buying, means provides products and services with deep low prices if buyers reach a certain number. Coupons are provided by manufacturers or retailers as a way of promotion. They usually distributed via mail, newspapers, magazines, mobile phones and Internet. The early group buying business model has lots of problems, one of them is time factor. Retailers offer the discounted deal only if buyers reach minimum numbers. During this time, buyers may move to other stores or choose online shopping. After Groupon created the online platform, it allows consumers spread news about interesting items and persuading friends, colleagues or families join in. This decrease the time to get the deal. It’s a win-win model for Groupon and customers.
Based on Groupon website, annual reports, and some articles, this report aims to find out the value proposition, value configuration, market seek，and revenue model of Groupon through analysis the operation of Groupon and relationship between Groupon and their stakeholders: local merchants and customers. Then identify the challenge and potential risk of this e-commerce. 2. Background of Groupon
2.1 Bulid and development
Groupon is a company which first combined the group-buying and coupon. It launched on November 2008 in Chicago, after two years, there are 150 markets in North America, 100 markets in Europe, and 35 million users registered on their website. In 2012, the company was valued at $1.35 billion, became the fastest company to go from zero to$1 billion in revenues, while Twitter and Facebook used 3 and 5 years respectively achieving this goal. As recorded in Groupon’s 10-K report, annual revenue increased in a high speed, from $312
As dynamic pricing mechanism been introduced, buyers and sellers can negotiate product prices in the market as well as the e-commerce market. Group-buying was appeared in the mid-1990s, and been popular in recent ten years as a business-to-consumer (B2C) transaction. Group buying, means provides products and services with deep low prices if buyers reach a certain number. Coupons are provided by manufacturers or retailers as a way of promotion. They usually distributed via mail, newspapers, magazines, mobile phones and Internet. The early group buying business model has lots of problems, one of them is time factor. Retailers offer the discounted deal only if buyers reach minimum numbers. During this time, buyers may move to other stores or choose online shopping. After Groupon created the online platform, it allows consumers spread news about interesting items and persuading friends, colleagues or families join in. This decrease the time to get the deal. It’s a win-win model for Groupon and customers.
Based on Groupon website, annual reports, and some articles, this report aims to find out the value proposition, value configuration, market seek，and revenue model of Groupon through analysis the operation of Groupon and relationship between Groupon and their stakeholders: local merchants and customers. Then identify the challenge and potential risk of this e-commerce. 2. Background of Groupon
2.1 Bulid and development
Groupon is a company which first combined the group-buying and coupon. It launched on November 2008 in Chicago, after two years, there are 150 markets in North America, 100 markets in Europe, and 35 million users registered on their website. In 2012, the company was valued at $1.35 billion, became the fastest company to go from zero to$1 billion in revenues, while Twitter and Facebook used 3 and 5 years respectively achieving this goal. As recorded in Groupon’s 10-K report, annual revenue increased in a high speed, from $312