Groupon CEO sees enormous opportunity after rapid growth
Groupon Chief Executive Officer Andrew Mason sees “enormous opportunity” ahead after more than three years of rapid growth, he said in a letter to shareholders.
“Although there are risks in moving too fast, companies often don’t survive long enough to apologize for moving too slow,” Mason said in the letter, which was filed Monday with the Securities and Exchange Commission. “By moving quickly, we reached a scale that has helped us solidify our market leadership, and accumulated data that is enabling our future and helping us continuously improve the experience of our customers.”
Groupon, the biggest online coupon company, has lost half its value since a November initial public offering amid concern over its ability to translate growth into profit. Mason is taking steps to shore up confidence in the Chicago-based company’s ability to account for its business.
“Groupon’s chief accomplishment to date has been discovering a business model that brings the power of the Internet to local commerce,” Mason said in the letter. “Entertainment, media, politics, and the way we buy products, connect with each other, and consume information — nearly every aspect of life has been fundamentally changed by the Internet.”
Groupon in March reported a “material weakness” in financial controls and lower fourth-quarter revenue than previously stated.
By the end of last year, the company sold more than 170 million so-called Groupons to more than 33 million active customers on behalf of more than 250,000 merchants, Mason said in the letter. The company pared losses to 12 cents a share in the fourth quarter of 2011, from 48 cents in the first quarter that year, according to the letter.
Last month, almost 30 percent of transactions in North America were completed on mobile phones, up from 25 percent four months ago, Groupon said. The typical mobile customer in this region spends 50 percent more than customers who never purchase on phones.
In the past year, Groupon said it doubled the efficiency of SmartDeals, its formula for personalizing coupon pitches. In Chicago, for example, the company said coupons emailed using SmartDeals had a 50 percent higher purchase rate.