Techcrunch reported on “shady” methods being used for the Groupon expansion in South America, primarily being driven from the Samwer brothers’ Citydeal team from Berlin ("Loaded with Fake Deals").
"We’ve received three separate reports that ClubeUrbano, Groupon’s Brazilian site that it acquired earlier this month, is loaded with fake deals and venues that don’t even exist. As one source put it: “Fake names, stock photos, fake addresses, everything.”
"Groupon President Rob Solomon explains that Groupon’s standard practice when it expands to a new market is to show users examples of the kind of deals they could get once the site goes live in their city.All of the fake deals on ClubeUrbano, he says, are meant to serve this purpose, but he concedes that Groupon has “done a terrible job of calling that out on the website”. Soloman says this will be fixed immediately."
Groupon founder Andrew Mason is anyways embarrassed about the incident and has distanced himself from the marketing tactics in the Techcrunch blog comments:
"I just want to apologize... we honestly didn't know this was happening, but that's not really a good excuse. We deserve to be called out - Michael's right, it's totally shady.
One clarification to Rob's comments above - this is in no way standard practice for us. For smaller cities in Europe, we run national deals until we have enough deals to run a local deal a day. I don't yet know if something got lost in translation between Europe and Brazil, but this is definitely not how we operate.
Anyway, I'm completely embarrassed (by the practice, not the bad press) - sorry to all, and hopefully our actions over the coming months will earn the trust and respect of the people of Brazil."
In the TC comments, some interesting elements of Citydeal’s expansion in Europe are pointed out.
Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.
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