Is Groupon’s Daily Deals Model in Trouble?

Too many knockoffs are clogging the market

In the past week, Groupon has lost two major rivals: Facebook abandoned its recent deals initiative, while Yelp scaled back on its own. But that sounds like a win for Groupon, you say? It might actually be a sign that Groupon is in similar peril, according to the New York Post.

Not only did the launch of Facebook’s and Yelp’s deals initially suggest that “Groupon is vulnerable to any tech company with an e-mail list,” analysts told the Post, but their recent failures may be proof that the daily deals model has reached an overload. Yelp said that it was difficult to make a mark in the dozens of daily deals emails now filling consumers' in-boxes, while merchants are tiring of the constant pitches.

“I think the biggest takeaway is how bad the business is in general,” Forrester Research analyst Sucharita Mulpuru told the Post. “There just aren’t enough good merchants willing to give their products away to support all these players. There aren’t even enough of those merchants to support Groupon’s business.”