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Groupon Expands Internationally, Unconventionally

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You know an idea works when many people are supporting it and some people are copying your business model. This is exactly what happened to Groupon, a “deal-of-the-day” marketing website. Groupon is a relatively new company but it has already been localized in several states around the United States and Canada.

Groupon started in 2008 as a part of The Point, a website that serves as a platform for collective action. Its first market was Chicago. Its reach then stretched to Boston, New York City, and Toronto. Groupon has now been localized in 40 markets and is continuing its expansion at a very rapid pace.

Founded by Andrew Mason, Chief Executive Officer, Groupon has been so popular that not only is it being imitated to no end by other start-up companies in Silicon Valley, but also by international observers as well. Barely three years since it first started, the company’s business model is already being copied by numerous start-ups that want instant market share in Groupon’s niche.

In what is a stroke of genius in infrastructure expansion, Groupon—instead of antagonizing these imitators—is looking to buy them out so that the company can gain solid footholds in the locales where the copycats are operating in. Last May, the company made a deal with its clone from Europe, Citydeal. This partnership reaped dividends for Groupon as it has instantly penetrated the markets of several Euro countries like the UK, Germany, France, Italy, Switzerland, Austria, Finland, Denmark, Sweden, Belgium, and Norway.

The latest move that the company made involved two clones from the large markets of Russia and Japan. Groupon bought a majority stake of Qpod.jp of Japan and Darberry.ru of Russia for an undisclosed sum. This move also extends the company’s reach to Asia.

The clones will be changing their site names and will be operating under the name of Groupon. The CEOs of these clone start-up will remain to operate Groupon’s newest branches. By the end of these deals, Groupon would be operating in 230 markets in over 29 countries which will translate to roughly around 13 million subscribers.

The money that Groupon is spending for their buying spree came from the Series C funding that the company has received a few months back. Majority of this fund came from Digital Sky Technologies which valued the company at around $1.35 billion.