Technology

Groupon May Gain as 19% of Non-Users Plan to Try Coupon Service


As Groupon plans for an IPO, the company's prospects for growth appear to be good, according to a Bloomberg/YouGov survey of consumers

(Bloomberg) -- Almost a fifth of U.S. consumers who have never bought a coupon online from Groupon Inc. plan to try it in the next six months, an indicator of the company's prospects for growth as it plans for an initial public offering.

Some 19 percent of people who aren't Groupon customers said they plan to buy from the site in the next six months, according to a Bloomberg/YouGov survey of 1,166 consumers. Meanwhile, 90 percent of respondents who bought a deal on Groupon in the past six months said they plan to do so again, the survey showed.

Groupon has faced skepticism since saying on June 2 that it has yet to make a profit and that its marketing costs are rising faster than sales. Its allure to potential investors in a $750 million IPO hinges on attracting new customers and keeping current ones, even as rivals such as Facebook Inc. and Google Inc. push into the market. A third of respondents who hadn't used the service had never heard of Groupon.

"Groupon's position among existing deal sites is strong, though Facebook Deals and the very new Google Offers loom on the horizon," Michael Nardis, head of YouGov investment products, said in a statement about the survey.

The portion of survey respondents who said they have purchased from Groupon is about equal to the number who said they plan to try it for the first time, meaning the service has the opportunity to double its number of customers by year-end, YouGov said.

Customer Base

Bloomberg and London-based market researcher YouGov Plc polled 1,000 U.S. residents online from June 3 to June 6. An additional 166 customers of Groupon were interviewed for the survey.

Chicago-based Groupon delivers daily discounts on hotels, restaurants and other goods and services to 83.1 million subscribers. Of those, 15.8 million had purchased a deal on the site by the end of March this year, up from 874,017 the previous year.

The service has built loyalty among existing customers, 23 percent of whom said they plan to increase the number of deals they buy on Groupon in the next six months. Some 21 percent plan to decrease buying on Groupon.

Only 16 percent of survey respondents who have never used Groupon said they were familiar with it. The company spent $263.2 million on marketing last year, according to a filing last week.

More than 480 daily deal sites now compete with Groupon, which has maintained the best visibility among consumers, according to the survey. More than half of all respondents, or 52 percent, said they were familiar with Groupon, while 29 percent were familiar with LivingSocial.com, its next-largest competitor.

Julie Mossler, a spokeswoman for Groupon, declined to comment.

MacMillan is a reporter for Bloomberg News and Bloomberg Businessweek in San Francisco.

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