Success Story

Groupon India CEO Bets Big on F&B and Sees Internet on Mobile as the Top Story of 2014

Posted: February 10, 2014 at 4:48 am   /   by   /   comments (0)

Ankur Warikoo shares the spectacular success story of Group India, which in three years has extended to 12 cities, signed up 6,500-plus unique merchants (including 56 per cent repeats), and almost every major hotel and restaurant in the country
WHEN Groupon India teamed up with Delhi Gourmet Club last year to launch Delhicious Week, the challenge to Citibank‘s three-city Restaurant Week India, which is entering its fourth year this March, few gave it much of a chance. It was a one-city affair and five restaurants signed up for it. By the end of Delhicious Week, the turnout, as well as the exposure they got on the Delhi Gourmet Club’s Facebook community page, took the participating restaurants by surprise. Instantly, the word spread in the industry that Delhicious Week was here to stay — and grow into serious competition for Restaurant Week India.

Sure enough, Delhicious Week returned this year with a bigger footprint. Eleven restaurants, an equal mix of five-star and stand-alone addresses, signed up. Between February 1 and February 6, the Delhicious Week days, more than twice the number of diners, compared with the turnout for the inaugural round of the event last year, showed up at the participating restaurants. The restaurants had been hand-picked by the Delhi Gourmet Club because of their reputation, and each offered a three-course special menu plus signature soft beverage at prices starting from Rs 999, depending on the meal time and day of the week.

For Ankur Warikoo, the Asia-Pacific Head of Groupon, the deal-of-the-day Chicago-based website that has grown into a $1.84 billion business globally in six years, ideas such as Delhicious Week keep powering his e-commerce company’s growing business presence in the Indian market. They create excitement for his customers, who are looking for deals that are more than just discounts.

In the case of the Delhicious Week, the difference was the menu that each restaurant especially offered to the guests who arrived with Groupon coupons. One of the participating restaurants, K3 at the JW Marriott, New Delhi Aerocity, even went to the extent of offering its entire buffet at the steeply discounted price of a Delhicious Week coupon. Of course, Groupon India’s biggest gamble was to sell a kilo of onions for Rs 9, which was a tenth of the market price, at the peak of the controversy over the skyrocketing price of the tuber. Within 44 minutes, 3,000 kilos were sold, and the by the time the deal was closed, more than 8,000 kilos had flown off Groupon’s virtual shelves. Ideas such as these drive Groupon’s business.

Warikoo, who’s also the CEO (or “chief customer care executive”) of Groupon India,  calls the website’s model “the last mile of advertising”. Groupon not only allows a business to showcase itself, but also goes a step further by converting the intent to buy created by the advert into an actual purchase. In doing so, Groupon has created a new e-commerce category of buying local services online. And as its name suggests (it is a portmanteau of the words “group coupon”), the website leverages the concept of “group buying” to drive new customers to businesses at a fraction of the cost of conventional advertising, even as it gives its online users a platform for securing discounts on items as varied as restaurant meals and spa outings.

“We only run limited-period promotions so as not to make any brand appear cheap,” says Warikoo, who’s an alumnus of Hindu College, Michigan State University (East Lansing) and the Indian School of Business (Hyderabad). What Groupon does, explains Warikoo, is get each participating business a minimum number of customers and the discount it offers is actually “the cost of acquiring new customers”. There are no charges upfront, so the business pays “only when the money is in”.

Unsurprisingly, Groupon India, which has expanded to 12 cities, has signed up 6,500-plus “unique merchants” across the country and 56 per cent of them are repeats. “All premium five-star hotels, barring those of the ITC, have worked with us or continue to do so,” Warikoo adds triumphantly. The demographic behind Groupon India’s success is the 25-38 age group, which, Warikoo says, is more likely to eat out or hang out at malls with friends. That may explain why 48 per cent of Groupon India’s revenues come from food and beverage, and another 30 per cent from the wellness segment.

Groupon customers, says Warikoo, who’s the only Kashmiri Pandit I know who’s a vegetarian, scout for the most valuable experiences from the best brands. So, when the site offered the Nirula’s classic, Hot Chocolate Fudge, for Rs 79, instead of its regular price of Rs 120, as many as 6,000 got sold in a week. And when the chholey-bhature of Kanha Sweets of Jaipur was made available for Rs 19, instead of Rs 49, the clicks on the ‘Buy’ button wouldn’t stop — 500 portions got sold in just two hours. So, how is Groupon India different from, say, a Snapdeal? Snapdeal, Warikoo says, pointing to a critical differentiator, is about products; Groupon is about services.

2014, according to Warikoo, will see internet on mobile becoming the game changer by enabling a website like Groupon to serve customers real-time. Sixteen per cent of all Groupon India transactions, in fact, are already taking place on this route. Warikoo expects this business segment to grow. “With 80 million units, India is the world’s third largest smartphone market,” he points out. “And by adding 8 million units each month, India looks set to overtake the US market, which has 140 million smartphones.”

Groupon’s India story started with the acquisition of a Kolkata-based deals website called in April 2011. The name didn’t convey the right value proposition, so the site was re-launched as in October 2011, before legal issues led to it being re-christened Groupon India. It’s been less than three years and the numbers look good for Warikoo and his team. And he’s not exaggerating when he says, “The Groupon India story looks very positive.”


 * Before taking charge of scripting Groupon’s India story in 2011, Warikoo joined two other Indian School of Business graduates to launch a website incubation company called Accentium (“the word means nothing!” he says). They were running six websites, including the phenomenally successful and, the car purchase and sale site, which the company sold to Ibibo.

* Warikoo and his team work out of an three-storied, open-plan office in Saket, and when they go to Goa for their annual get-together, even the janitors and parking attendants aren’t left behind. Who each of them gets to share a room with is decided by a draw of lots. Last year, Warikoo had the parking attendant as his roommate. Here’s a real aam aadmi CEO, who lives by the principles he espouses.