Why Groupon is now selling onions

An odd product for the daily deals site, or a brilliant move?
Written by Tyler Falk, Contributor

Groupon, the online deals site, is better known for its travel and beauty discounts than its grocery deals. But in India, sales of the onion, a staple in Indian cooking, are soaring.

But what's driving Indians to burn through Groupon's inventory of onions instead of just going to a local market?

As Wall Street Journal explains, the price of onions has skyrocketed recently:

The price of onions in India has been a talking point in recent weeks, after price rises meant a kilogram of the widely used vegetable was being sold between 39.92 and 22.5 rupees a kilogram at the Azadpur market in New Delhi, one of the country’s largest wholesale markets.

For consumers, the  vegetable prices hit 85 rupees a kilogram and close to 100 rupees for that amount in some retail markets in the capital city recently.

The price of the Groupon's onion deal? Nine rupees per kilogram (approximately 14 U.S. cents). Over seven days, Groupon plans to put a limited number onions on sale (limited to one kilo per customer) and ship them for free to customers in 78 cities throughout India. Looking at demand, the deal has been a hit. The onion inventory sold out the first day.

But onions aren't just a selling point for an American company looking to boost its customer base in India. Like gas prices in the U.S., India's opposition party is using the rising onion prices to bash the ruling party. Politicians have even gone so far as to set up their own discounted onion stands.

This latest move from Groupon might not win them political office in India but they might win over some new fans.

Read more: Wall Street Journal

Image: Groupon.co.in

This post was originally published on Smartplanet.com

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