Groupon Singapore: Lemon law not a problem for us

The company has been preparing its employees and merchants to comply with the new rule and adds that daily-deals industry still viable and leveraging mobile devices will be a key focus for it.
Written by Liau Yun Qing, Contributor

SINGAPORE--Online shopping merchants need to be accountable and comply with the country's recently introduced "lemon law", said Groupon Singapore executive who notes the group-buying company had taken steps to ensure its employees and merchants understand and are complaint with the new law.

Singapore's "lemon law" came into effect on Sep. 1 and aimed to protect consumers against defective products by allowing them to seek redress.

Adrian Tan, COO of Groupon Singapore, believes the onus is on online shopping companies to be responsible for conforming with the "lemon law".

"Most of the time with online shopping, the customers can't find out who's selling them the things. Whether the 'lemon law' is applicable or not [for a product], it's for the merchant to be accountable," he said, in an interview on the sidelines of a media briefing on Wednesday.

Besides making sure that the products and merchants that Groupon works with are compliant with the "lemon law", he noted that both customer- and merchant-facing employees have been trained on the new regulation.

Groupon's return policy is already compliant with the "lemon law", according to Karl Chong, CEO of Groupon Singapore. He explained that customers can bring back a defective product within six months of purchase for repair or exchange. If the customer is still not satisfied with the repaired or exchanged products, Groupon will give a full or partial refund, Chong said.

On top of the existing policies, Tan said Groupon Singapore has set up a physical outlet as a way of being accountable to its customers.

Mobile users spend 50 percent more
According to Chong at the briefing, 30 percent of Groupon Singapore's purchases were made over a mobile device. He added that customers who bought Groupon vouchers tend to buy 50 percent more than those making purchases from a desktop computer.

He explained that Singaporeans spend a lot of time on their smartphones, which may be the reason why they buy more when on their mobile phones.

The company has a mobile app on "almost every smartphone platform" which combines offers from different Groupon branches around the world, said Chong.

Besides a mobile app for consumers, Tan said the company has an app for merchants. He added that the parent company recently bought over a CRM company which is part of its move to become more merchant-centric.

Daily-deals sites consolidating
Chong reiterated that the daily-deal market is still viable but is undergoing consolidation.

Citing third-party research, Chong said a total of 72 companies were launched in Singapore in the past two years but only 19 of them remain today. This means that 74 percent of group-buying companies shut down during that period, he said.

According to the study, out of 37 group buying sites, 57 percent lasted for only half a year. Chong said he expects only one or two major players to emerge at the end of the consolidation.

Chong said the lack of resources is the main reason why its competitors have shut down. As a large business, Groupon is able to achieve revenue to cover costs such as customer service, marketing and editorial, he said. However, for small group-buying businesses, the scale of its cost may overtake the revenues, he added.

Merchants need to track customers
The revenue sharing model between daily deal sites and merchants has recently been subject to criticism, with some businesses complaining did more harm than good.

In response, Chong said merchants needed to track their Groupon sales to maximize the returns of the deal. If the merchant tracks which customers come back and how much upsell they have done, they tend to have a better experience with group-buying deals, he noted.

Besides training merchants on how to handle extra sales that come from selling vouchers and to set their expectations of their deals, Groupon Singapore does a monthly survey with its merchants to find out what more can be done to better its service, he said.

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