Groupon Inc (NASDAQ:GRPN) is winding up its operations from the South African market. Many consumers were caught in a dilemma following a message posted on the company’s website publicizing the unexpected shutdown. The online marketplace for goods and services, which launched in South Africa in 2010, says that the move was necessitated by its desire to streamline its global business operations. Apparently, while this may be a shock to many, to others, it was expected, given that the e-commerce platform has been shedding off some of its offices since September 2015.
But even as South Africa experiences real heat of pull out, the US-based company says that it will continue reducing its international footprint. Initially, it was in 27 countries, but today, it is at the count of 15. However, it has been under financial pressure for a while now to the point of reporting a net loss of $35, eight million in the third quarter of the year. But apparently, it had goof records in the North America region having reported double-digit growth.
But all current vouchers will remain valid
Groupon ceased its South African operation as of 4 November 2016 according to a statement on its website. So what happens to the vouchers that had been purchased before then? Part of the statement announcing the closure stated that they are still valid up to and until the date stated on them. The terms and conditions remain intact, and they can be used for purchase. However, those who are not sure about using their voucher will get cash refunds, but they must place a refund request before 30 November 2016.
What does Groupon’s closure imply?
Clearly, there is stiff competition, and Groupon has faced it head on from the likes of Wikideals and Daddy’s Deals. Besides, the South African market has been quite daunting for foreign investors in the recent past. The company says that it has not taken the decision lightly, but again it had to weigh options in terms of investment versus results.
But on the other hand, Media analyst Arthur Goldstuck says that the website, which has been running for six years, was starting to have declining customer service. There were thousands of customer complaints, which took forever to be resolved. Thus the writing of its closure was on the wall.
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