Groupon captures the market for online coupons in Lima, Peru

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A popular recent offer was tickets for paragliding tickets over Lima’s bluffs: 260 coupons were snatched up. More than 300 people bought the coupon for a 60 percent discount on a manicure and pedicure at a trendy spa. (Under the Groupon scheme in other countries, a minimum number of people need to buy in order to activate the offer; in Lima there is no minimum.)

Diego Arbulu, at left, is Groupon's Peru country manager.
Diego Arbulu, at left, is Groupon’s Peru country manager.

The offers are typically luxury services and high end goods: restaurants, massages, brand-named clothing. “Readers can discover good places like cevicherías, spas, beauty salons,” Arbulu mentioned, referring to Lima’s foreign community that reads LivinginPeru.com. “For newcomers to Lima, Groupon can be a good tool for those people.”

The work that lies ahead for Groupon is consistently getting top companies and brands in Lima to participate, which requires offering a minimum 50 percent discount. (Groupon gets a commission from each purchase.) Arbulu sells the Groupon offer to participating companies as a marketing method. “The results we offer are clear. It’s a strong tool for publicity,” he says. Participating companies get their name in the inboxes of thousands of users,

One last aspect of Groupon’s model is that users can win virtual money by recommending offers to friends. If Maria, for example, recommends a spa offer to a friend who goes on to purchase the coupon, Maria gains points to be spent on future Groupon offers.

For now, the company’s quick success is partly due to lack of competition, which Arbulu admits. In the U.S., for example, dozens of companies are offering similar coupon schemes, such as LivingSocial , Ideeli  and Yipit.  Meanwhile, Groupon’s goals for the future are to sell 1,000 coupons daily and expand to Arequipa and Trujillo.

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