Internet deals site Groupon has announced mixed second-quarter results today: alongside a huge growth of turnover, net losses grew as well – the cost of the formidable worldwide expansion.
Turnover grew over 900% in one year
The group’s turnover peaked at 878 million dollar (617 million euro), which is more than ten times as much as in the second quarter of 2010 (87.3 million dollar or 61.3 million euro). This result is also a staggering 36% up from the first quarter of 2011, when turnover was ‘only’ 645 million dollars (453 million euro).
The number of subscribers also grew – although not as exponentially – and reached 115.7 million at the end of June, almost 40% more than the 83.1 million in March. 23 million subscribers also bought at least one item in the web shop, accumulating 32.5 million deals throughout the quarter.
Growth creates losses
In order to handle this explosive growth, Groupon has hired more than 1000 people in the last three months, lifting their administrative expenses from 126 to 193 million euro. This led to a net loss growth of 72 million – almost three times as much as in the second quarter of last year, even though the company lowered its marketing costs by 19% compared to the first quarter.
While Groupon has been criticised for their commercial practices (it has been claimed that Groupon claims 50% of each transaction – Groupon’s own figures suggest their average stake is 19 euro), there is still no need to worry for CEO Andrew Mason as almost 50,000 companies are still on the waiting list. Consumer loyalty is also still on the up, with the average user buying four deals this quarter – compared to 3.8 from January to March and up from only three in 2010’s Q2.
