Is the “goods” move good for Groupon Inc (NASDAQ:GRPN)?

Posted by Lynn Eisler August 29, 2013 0 Comment 1013 views

The latest news on Groupon Inc (NASDAQ:GRPN) was that it was following in Amazon’s footsteps and developing a network of warehouses for its goods business that it wants to expand in a big way. It might just be a step in the right direction but it’s not going to shake things up either for Amazon in the manner that some market watchers are claiming it will.

A niche business

It is definitely a sensible move for Groupon but might not grow to be more than another niche business. The CEO has also made it very clear that the company will not be distributing all its products via these stores and so the disruption will not really be so huge. Amazon is a dominant in the products delivery space. Despite the fact that Groupon is a big company, it will not be able to compete with Amazon right away on the scale front.

Amazon interested in Groupon?

With their selection of products, excellent delivery, low prices, customer service and speed, Amazon had already hogged the limelight and grabbed center-stage. Some analysts feel that with this move, GRPN might just end up becoming an acquisition-target for Amazon. On the other hand some prominent retail analysts feel that that is not a possibility either. Amazon wields a great deal of muscle in the retail goods market and has already made some investments in companies that are like Groupon, Living Social being one of them.

Another fact that cannot be overlooked is that for the past few years, Amazon has also been promoting Amazon local. This concentrates on the daily deals market. At this point, Amazon taking over Groupon is nothing more than a redundant thought.
Amazon is a powerhouse of goods and has carved a very big niche for itself in every segment of the internet and the retail landscape.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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