A recent report by Deloitte predicts that hundreds of online coupon businesses will fail in 2012, while those that survive will have to operate on much slimmer margins. "They may need to accept lower commissions on sales of coupons to entice retailers to use their services as well as shifting their focus to value."
Groupon has been caught up in a string of conflicts with small businesses who have used Groupon but ended up in overstretching themselves. (One photographer offered a one hour sitting and a CD of all the images for £15 and received 670 buyers. Not surprisingly the photographer did a runner!)
A couple of days ago Groupon shares fell 10% on declaring a fourth quarter loss of $42 million.
Last year the Office of Fair Trading launched an investigation into Groupon after the business was found to have broken advertising regulations nearly 50 times in a year. (This report was in The Daily Telegraph).
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