Groupon, the flawed group discounting scheme, is giving up on three Asian markets as part of a global downsizing which will see 1100 jobs axed.
In Asia, the listed US eCommerce business has closed its doors in Thailand, the Philippines and Taiwan. Outside Asia it has already exited Greece and Turkey and will now close operations in Panama, Morocco, Puerto Rico and Uruguay.
Earlier this year it sold nearly half of its South Korean operation.
The company is putting a brave face on its retrenchment, describing the closures as a restructuring and playing down the impact.
But the reality is that its business model has essentially amounted to a short term fad. Its daily deals format – which have caused major problems for retailers and customers in many markets – is no longer so appealing to consumers with other online players – both newcomers and established brands like Amazon – offering deals just as good with fewer conditions.
Groupon has started selling goods online as well as coupons, suggesting a longer term plan to adapt its business model.
At the end of last year Groupon had about 11,800 employees around the world. The 1100 employees to be shed will mainly be workers in sales and customer service, who will finish up by the end of this month.
Groupon’s share price has fallen 79 per cent since November 2011, when it was listed in the largest IPO since Google’s float.