Groupon sells 25% of US deals on mobile

Going Mobile

A quarter of Groupon deals in the US are bought by users on their mobile devices, according to figures released by the firm, indicating that the firm’s recent efforts to boost engagement with its mobile apps are paying off. The firm’s mobile app for iOS and Android devices is proving increasingly successful with both merchants and consumers, with users were three times higher year over year in December to surpass 9m, while some 12,000 merchant partners have now signed up to the app. The figures will come as welcome news to Groupon’s backers, as pressure mounts on the daily deals firm to diversify its revenue streams and prove the long term sustainability of its business model.

As smartphone adoption increases and the capabilities of our mobile products evolve, we look forward to harnessing the power of mobile to make it even easier for merchant partners around the world to run and market their businesses effectively,” says mobile VP Mihir Shah.

The figures indicate that Groupon beginning to boost its mobile engagement, as the firm diversifies from its core email-based web offers. The firm’s data is indicative of the growing demand for mobile offers in the wider daily deals market, with 90% of US consumers who downloaded a mobile app in December saying that they have also used daily deals websites such as Groupon and LivingSocial. With smartphone penetration in the UK and US now accounting for half of the population, the margin of users accessing Groupon deals from mobile is likely to widen over the coming year. eMarketer claims that smartphone adoption will drive the number of US mobile coupon users up by 80% during the next two years, as the market’s success continues on new platforms.

Stepping up its mobile efforts to provide location-based offers makes sense for Groupon, given that its business model depends on deals offered by local businesses. The firm recently bought two mobile startups, geo-location company Hyperpublic and digital payments firm Kima Labs, in a move indicative of the firm’s ambitions on the platform. Groupon also struck its first deal with a mobile operator, Deutsche Telekom (DT) to bring its deals service to the mobile operator’s subscriber base across Europe. A growing mobile presence will help the firm to boost engagement with its Groupon Stores service, which allows merchants to launch their own deals, as well as Groupon Now, which sells offers in real time, based on location.

However, Groupon still faces an uphill struggle, despite the growing success of its mobile platform, with analysts still questioning the firm’s USD12bn valuation when it went public in December last year. Now active in more than 30 countries around the world, the firm has been criticised for exorbitant marketing campaigns and for accelerating its expansion rather than focusing on growing its revenues. The firm’s results for the first quarter since going public did little to quell its critics, after a USD42.7m net loss, when many analysts expected to report a profit.

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