Successful business from social media

Ever heard of GroupOn ?
The name rhymes with "Coupons" didn't it?
Still have no idea?

They sell Coupons

Doh!! Big deal! My 12 year old nephew sells coupons. So what?

Did your nephew get a $6 Billion buy out offer from Google?
Yes that's true, Groupon is an American company which has made fortune from social media, both for them as well as their clients.  Groupon was established in 2008 and in only two years they have made this stand for themselves. according to a market projection Groupon would be the company which would have earned a billion dollar  in the shortest time! Cool for a new venture, ain't it. They have grown their organization to a point where they only need to acquire new firms working in their business sector.

How do they work
They are the global local giant in social marketing now. What does that mean? They are a global company which is tapping the potential of local marketing. The idea was brilliantly implemented and here  they are.
Groupon opens up a branch in a big city, the staff of the branch study and pick out the local businesses which can take advantage of their services. Then they advertise the services or products of the company on the groupon website. Now when you go on the groupOn website and select the city which you are interested in you see the deal of the day , this deal is specially designed for the groupon customers and discounts upto 85% are given on the services or products. Groupon does not directly charge the local business clients, they take a cut in the profit, Often upto 50%.

How do they figure out the amount of customers they have generated
As i said you get the deal of the day on the GroupOn website, When you are interested in a deal (for example 50% off on steaks and sausages at some local barbecue) you buy the coupons for the deal. You pay the price of the coupon to groupOn through your credit card and recieve a coupon. You take the coupon to the local service provider (barbecue shop) and take the service or products (eat a hearty meal ;))

Ooh ooh I am interested too. I want to start my own GroupOn.
Go ahead and do it. Only don't expect the same kind of revenue they generate. One of the many reason for that is - Their is no entry barrier . If you have 1 lakh rupees any software company can develop a groupOn for you. No wonder there are already 500 online businesses trying to repeat the success of Groupon, 200 of these are in China alone. here is a list of few copycats ;)

I am a local business owner and want to take advantage of this new kind of marketing platform
Go ahead there are a few online business already operating in India, mydala, grabbon and wanamo are some of them. But while Groupon generates thousands of customers every day for their clients, the Indian counterparts are lagging behind. On an average they are making 25 to 50 deals every day. That is not good enough by any standard. The providers in India are just copying
GroupOn that's a big problem. A large part of groupOn customers are educated young females in their 30's who spend a lot of time on the internet, so their feature healthcare, healthy living, beauty care products more.
In India the women in their 30's don't have the same kind of access to internet, Inian providers have to understand that. So wait until these provides are more mature.

Hopefully the local marketing culture will catch up and both service providers and local businesses will be able to take full advantage of the system.