The perils of Groupon

There has been no shortage of criticism. The Economist makes a good point:

Groupon aspires to be global, but the markets it serves are intensely local. Internet selling is best suited to “experience goods”. These are goods and services the quality of which you cannot judge until you experience them, such as haircuts and Thai meals, so there is no advantage in having a bricks-and-mortar shop for people to browse in. (In North America 83% of Groupon’s deals fall into this category.) The trouble with experience goods is that generally you cannot separate manufacture from delivery: you cannot cook a meal in Guangzhou and eat it in New York.

Of course, the most common point made against the daily deals business is that there is a ridiculously low barrier-to-entry. If imitation truly is the sincerest form of flattery, as I recall one article or video on Groupon began, then Groupon must be truly flattered.