afaqs!

A deal site is now a bad word: Ankur Warikoo, Groupon India

By Biprorshee Das , afaqs!, Mumbai | In Digital | October 22, 2012
Completing a year in India, Crazeal, the Indian unit of US-based Groupon Inc., is investing heavily in technology to serve its merchants better; Ankur Warikoo, CEO speaks to afaqs! on the new tool Merchant Center and shares his thoughts on the deals segment in the e-commerce space.

A good bargain is something everyone likes. Particularly with the festive season on in the country, shopping is one of the buzz words everywhere and everyone is on the lookout for a good deal on purchases.

Websites offering unique deals on purchases are many in the country. And, each chases customers with promotions aggressively. Deals website Crazeal, the Indian unit of US-based Groupon Inc., has a different strategy to target customers - by choosing the right merchants to promote.

A screenshot of Merchant Center

Crazeal has brought to India its global tool for merchants, called the Merchant Center. The tool is an application that will provide merchants with a platform to evaluate and track their promotion performance.

The technology will be provided free of cost to Crazeal's partners. Merchant Center will enable merchants to track the number of vouchers their deal sells daily, check the number of vouchers redeemed in each of their outlets at various locations, get real time feedback from customers, determine the number of customers who would recommend them to others and redeem the vouchers to enable their payments on a real time basis.

Each of the Crazeal vouchers is bar-coded and has a unique QR code that helps merchants recognise customers who have bought their deal. It can also be done through the company's merchant mobile applications available on the iOS and Android platforms.

Ankur Warikoo

Ankur Warikoo, chief executive officer, Groupon India, speaking on the new technology tells afaqs! how it is a unique initiative in the e-commerce space. "As a company, we continue to invest in some serious technology for the merchant because as the company's vision, we want to be the local operating system for small and medium businesses. We are the first online platform in India to have a technology for merchants while being a consumer-facing business. Not even credit card companies would probably have this kind of analytics for their merchants. They have it for their consumers; they will tell them all about their expenditures but they will not have as much information for their merchants," Warikoo says.

He shares his thoughts on Crazeal's performance in the country in the past one year. Warikoo is of the view that it is very important for Crazeal to work with its merchants as partners and target the right kind of customers with the designed deals and promotions.

He is of the view that the token price model adopted by many deals sites in India, wherein the consumer is charged a nominal amount for a deal, may not be the appropriate way to approach things.

According to him, the model discourages loyalty, telling customers they could be deal shifters. In the case of Crazeal, the route taken is the full price model where the entire price is collected from the customer.

"Our redemption rates are as high as 95 per cent, as opposed to the low rates of other players. For our merchants, it gives them a better quality of customer. They are okay with getting less but better customers. We only make money when the merchants make money. This gives merchants the confidence that we are truly working hand-in-hand with them. We are working as partners and are not just an advertising platform for their services," he says.

Warikoo is upfront that Groupon is a lot more focussed on its merchants than customers.

"Our business is truly about the merchants. So, if we get the right merchants on board, the right customers will automatically come. So instead of running multiple deals in a day, we focus on the main deal concept, which is a deal-a-day. It works because instantly you have a great brand before the customer and automatically you have the right kind of people buying the deals. For us, it is about giving the best deal to the customer while making the merchant happy," he says.

While the chosen approach might make Crazeal seem a pricey proposition, Warikoo insists it is only about wanting to work with the brands that are not necessarily the most expensive but definitely, the best in the business, so as to target similar premium customers. He believes that this is the key to sustain in a segment that is already rather pressurised.

"We have sensitised people towards the right way to appreciate deals. It is unfortunate what we see in the market. It is a badly burnt industry already. Both consumers and merchants are disillusioned. Merchants have not had a great experience giving deals. They found customers they never wanted. Customers have been badly burnt because merchants have not treated them well and a variety of other reasons. It has created a very negative sentiment over what a deal site is. A deal site is now a bad word.

"It is a very hard thing to change. We are in the job of changing. We do not like the word 'discount'. In any of our communication, you will never find that word. Even in our deals, there is a very small area that says 'X per cent off'. That is where you are getting people who are not driven by the discount but the combination of price and brand. We are trying and it is just the beginning," he adds.

Going forward, he says that Groupon will continue to invest in technology as it looks to grow further in the market.

"The market that we are sitting on is massive. One thing though is definite; we will be bringing in a lot of technology that India has never seen. Merchant Centre is just the beginning,"

says Warikoo.

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