Groupon successfully listed on Friday, but its business model is still being questioned
lead: U.S. investment site Seekingalpha published Monday signed Charlie · weeks (Charlie Zhou); the article said, Groupon’s business model is not sustainable, the user growth rate will soon fall.
below is the full text of the article:
Groupon growth is a direct result of its marketing investment, this year, the site to spend $600 million to spend marketing, accounting for nearly $1 billion 120 million of its net revenue of $50%. Groupon user growth is also a direct result of its marketing investment, Groupon 2009 marketing expenses of $4 million 600 thousand, but in the first quarter of 2011, marketing expenses soared 45 times to $208 million. Over the same period, the growth rate of Groupon users is almost consistent with the growth rate of marketing spending, increased from 1 million 800 thousand to 83 million.
this trend shows that Groupon is expanding marketing support to get new users. With the continuous increase in marketing expenses, the amount of users is slowly accumulating. If the marginal cost of attracting new users is increasing, so Groupon only in every new user who can put under the condition of increasing growth, but Groupon in the prospectus of the information provided in the opposite.
Groupon in the prospectus gives them in four cities in terms of revenue and user information, the four cities are Chicago, Boston, Berlin and London, but the development trend is worrying. Groupon revenue per user in the United States is declining, Berlin and London flat. Even the Groupon display of urban business have such a situation, I do not know what other cities will be the performance.
Groupon current business model is not sustainable, they will soon fall into this situation: the cost of attracting new users will greatly exceed the value of the user’s input. As a result, Groupon subscriber growth will begin to decline, they need other reasons to confirm its $13 billion valuation. (Xiao Ming)