How Groupon pulled off the great onion coup

Even if it had stuck a great deal, how could the portal sell onions at a price that it was last sold at in 1999? More importantly why would it make such an obvious loss?

FP Staff September 12, 2013 19:52:04 IST
How Groupon pulled off the great onion coup

With the price of onions touching sky high in India recently, going beyond Rs 80 per kilo, e-commerce firm Groupon sought to boost its popularity by offering a mouth-watering deal by pricing it at Rs 9 a kilo.

The Groupon ad to herald the new campaign stated:

"People haven't experienced onions in a long, long time. That sweet, pungent aroma of onions being sauted to a nice golden brown before being added to your mum's signature curry is no longer familiar. This much-coveted, much-written-about, much-craved-for vegetable is now almost as expensive as caviar, diamonds and Donald Trump's wig! Men are scrambling to the market to pick the perfect onion ring to please their ladies."

How Groupon pulled off the great onion coup

Screen grab from Groupon site

The weeklong bargain began on 5 September, and offered a kilogram of onions at Rs 9 for 3,000 buyers each day.It turns out Groupon had struck a deal with onion distributors to procure 3,000 kilograms of fresh onions every day for seven days.

Even if it had stuck a great deal, how could the portal sell onions at a price that it was last sold at in 1999? More importantly why would it make such an obvious loss?

In a detailed analysisNextBigWhat found that Groupon actually made a killing through their digital marketing campaign, captured thousands of new customers and amplified their customer base at around half the cost of a digital marketing campaign.

It took only 44 minutes to sell the first 3,000 kilograms of onions, and the sudden traffic spike subsequently crashed Groupon's Indian site, according to Al Jazeera America.

The day this deal went live, the total Google searches for Groupon jumped by 400 percent in a single day.

Within six days,Groupon has 22,727 transactions on their website and since each transaction mandates a registration, they would have generated over than 15,000 new customer registrations.

Who says onions only bring tears to the eyes?

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