Saturday, August 11, 2012

Coupon site closes

Just two years ago, the coupon business was the darling of online shoppers.

Buy a coupon and you get to enjoy major discounts on a range of products.

Now, some of these online coupon companies seem to be falling on hard times.

The latest is, one of the 50 group-buying websites in Singapore.

The site had been heavily advertised and has close to 2,000 followers on Twitter and 30,000 likes on Facebook.

But merchants and customers said that calls to have gone unanswered since last Wednesday.

It usually publicises a daily deal on its website and in an e-mail newsletter, but software engineer Christopher Ang, 32, said the newsletters have stopped coming in since Monday.

"I also went to the redemption office at Boat Quay on Thursday to collect an electric steam mop that I had purchased a coupon for, but the shop was closed," he said.

"All they had was a sign that said that the redemption office would be closed from Aug 2 to 6."

Mr Ang fears he might lose the $60 he has paid for the electric mop, especially since the collection of the item had been postponed twice by the company since June.

A check with the Accounting and Corporate Regulatory Authority (Acra) yesterday revealed that Volotek, the company that runs, is under liquidation.

Although the sign on the redemption office stated that operations would resume yesterday, only agents from the liquidators were present when TNP was there.

Customers such as station manager Muhammad Farrid, 27, had filed reports with the police last week .

He had paid $588, half the original price, for a three-day two-night holiday at the Villa Baladewa Empat Bali resort in September.

"Two Saturdays ago, I received an e-mail from the villa operator saying that is facing liquidation problems and is unable to pay them for the deal coupons that they have issued.

"They (the resort) are not obliged to fulfil the bookings for stays from Aug 2 onwards, which includes my stay, and referred me to contact the website for a refund," said Mr Muhammad.

He has made many calls to almost every day since July 28, but could not get through.

Some of those affected have banded together online via the Facebook group "Victims of", which was set up on July 31 and now has more than 140 likes.

They plan to lodge a report with the Consumer Association of Singapore (Case) and the police.

A spokesman for the appointed provisional liquidators, Raffles Corporate Consultants, said that they are taking stock of the company's assets and will contact the customers about the delivery of their items as soon as possible.

Items that have been delivered to the redemption office before's winding-up may also be collected after inspections have been made.

Tough competition

The group-buying business, also known as deal sites, involves online firms striking deals with various merchants to supply goods such as beauty and travel products at a significant discount.
These can be redeemed using vouchers sold by the sites.

Singapore Polytechnic business lecturer Andrew Lee offered several reasons for websites like being unable unable to sustain their business.

He said: "Competition is very intense in the marketplace, with around 50 'me-too' coupon companies offering somewhat similar deals.

"As a result, their earnings may not be enough to sustain the overhead cost of operation and marketing."

Just this year alone, 30 sites have folded.

They include Mocca Perks, a group-buying website founded by Singapore's largest broadcaster, MediaCorp.

It shut down in April, barely a year after it was set up, and reminded customers to claim all unredeemed vouchers by Sept 2.

Could the decline in sites be an indication of cooling consumer enthusiasm or that of companies unable to sustain themselves?

Mr Lee said that consumer demand seems to be "maintaining", but some deal websites may be underperforming as they are new to the game.

The two giants here - Groupon Beeconomic and - account for about 70 per cent of takings, The Straits Times reported.

In's situation, Case has received three filed and unfiled cases up till June.
Filed cases are cases where consumers authorise Case to handle on their behalf.

Non-filed cases are feedback, inquiries or consumers who may have decided to deal with the vendors directly after seeking advice from Case.

The association's executive director Seah Seng Choon said: "If consumers suspect foul play in which the vendors collected money but failed to carry out the transactions, a police report should be made.

"Consumers should conduct research to ensure the credibility of the business and find out how the group buying system works before making any purchases."

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...