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November 15, 2012

Groupon appoints new COO

After losing two COOs last year, Groupon appoints its previous senior vice president of global sales and operations as the new COO.

By Tineka Smith

Groupon COO
Kal Raman, Chief Operating Officer, Groupon (Photo: Business Wire)

The new COO, Kal Raman, joined the company in April 2012 after working as the vice president of Global Fulfillment at eBay.

"In a very short time, Kal has had a significant impact on increasing the number and quality of local businesses using the Groupon platform to the benefit of Groupon customers around the world," said Andrew Mason, CEO of Groupon. "We are already seeing progress in Europe and Kal will be instrumental in leading our company as we deploy tools and technologies that will help us continue to grow both Groupon and the categories in which we operate."

Raman’s background also includes serving as senior vice president at Amazon as well as working in management at Wal-Mart.

Raman’s appointment at COO comes after Groupon released disappointing Q3 2012 results. The company’s shares continue a downward spiral, falling to a record low of $2.73 on Wednesday.

Analysts had expected the company to hit $591m in revenues for Q3 2012, but Groupon missed those expectations with revenue of $568.6m.

The company suffered a net loss of $3m, an improvement from last year’s $54.2m but its growth rate has steadily declined.

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Groupon had a growth rate of 89% year-on-year in Q1 2012 fell to 45% in Q2 2012 and 32% for Q3 2012.

Groupon’s CEO said "continued challenges in Europe" offset its strong performance in North America.

However, other industry players say what Groupon is experiencing is the stabilisation of discount economy growth.

"Consumer demand for money-saving deals is well established and unlikely to disappear; what we’re currently seeing is a normalisation of the industry, as the phenomenal growth we’ve seen in the discount economy over the last few years stabilises," Peter Casey, European Director at Nimble Commerce told CBR. "The industry is already diversifying and we will see a move away from the really deep discounting and pure ‘daily’ time-limited offers that Groupon has become known for."

Gerard Doyle, CEO of Discount Vouchers told CBR, while Groupon’s growth experienced phenomenal growth initially, it was unsustainable.

"The big players have often overlooked the need to be more targeted in their approach and as the industry matures personalisation is becoming more and more important," Doyle told CBR. "It doesn’t matter how big your database is if consumers aren’t opening your emails. The only way to build a solid business in this industry is to make sure you’re sending the right messages to the right people, at the right time, and that takes a lot of investment in your data."

Please follow this author on Twitter @Tineka_S or comment below.

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