) recently launched Freebies on
) iOS based devices. Launched in 2013, These include over 30,000
digital coupons, codes, sales, giveaways and samples from over
6,000 brands spanning 245,000 physical locations.
This addition makes Groupon the most widely distributed mobile
coupon platform in the United States. The company plans to expand
the offering to some key international markets in the second half
The Freebies mobile platform has built-in short-messaging-service,
) integration to enable consumers to easily share the best deals
from their favorite brands with family and friends.
The addition of this feature on iOS will enable shoppers to save
money as they no longer will have to clip the coupons. On the other
hand, with more than 80 million downloads worldwide, the brands
will also get an enormous platform to drive customers to their
apps, online stores and so on.
This move of adding Freebies to mobile devices will make it
possible for Groupon to offer location-based alerts about deals or
coupons. This will enhance customer satisfaction, which in turn
will drive growth.
The Freebies reflects Groupon's strategy of diversifying its
business besides the core daily deals segment. However, the coupons
will take some time to contribute meaningfully toward top-line
growth. This is due to the fact that unlike daily-deals (revenue
earned upfront), Groupon will earn revenues from coupons only if
customers redeem them and purchase goods from the retailer.
In the recently concluded first quarter, 50.0% of its transactions
in North America were through mobile devices. Moreover, more than
9.0 million people downloaded Groupon's mobile app during the
Although mobile presents ample growth opportunity, increasing
competition from more established players such as eBay and
Amazon.com remains a major concern. Google's decision to quit the
coupon business called Zavers may also remain an overhang on the
stock going forward.
Moreover, a volatile macro economic environment and continued
investments to expand Groupon's merchant base are expected to
impact near-term results.
Currently, Groupon carries a Zacks Rank #3 (Hold).
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