Why is Groupon India selling onions at Rs 9/Kg when the market price is Rs 50?

23 Sep
2013

Answer by Ankur Warikoo:

Setting aside modesty (which I would endorse any other day), this was indeed a brilliant move for us. 

Context:
Groupon India launched on Sep3rd a crazy deal – selling Onions at Rs.9/kg – when the market rate is between Rs.60-70/kg.
Onions are a staple food item in India and the rising price is a hot topic of discussion for the past 3-4 months. In the past, rising onion prices have been the reason for even governments toppling in elections.

Mechanics:
Our objective was to shock and awe our customers. And in the process generate some PR around the brand.
Rs.9/kg was chosen because of the shock value (this price was last seen in India in 1999)
Onions were home-delivered across 78 cities in India (free of cost)
Only 1kg per delivery address was allowed
We released 3000kgs of onions everyday for 7 days – with the intent of selling 21,000 kgs in all

Consider this:
We sold 22,500+ Kgs of onions over 7days.

And we chose, as beautifully explained in the other answer, a product that was mass and was being spoken of.

In these 7days,

  1. Our site crashed on the 2nd day, because of the traffic we had never witnessed before – Demand for discounted onions crashes Groupon's Indian website
  2. We got over 16,500 new buyers on the site over 7 days, at a never before cost
  3. We activated over 3000 buyers that had not bought anything in the past 90 days
  4. It increased our brand search on google by over 400%
  5. Business went up by 60% and is now stabalized (10 days post the campaign) at 12% higher than the base before
  6. This deal generated unprecented press coverage – all national press carried it (in a positive light) and it even reached international (WSJ, AFP, Huffington Post, Verge, Medium, Gulf times
  7. Indian TV picked it up
    • http://www.youtube.com/watch?v=6CqpIkbVP7E&feature=youtu.be
    • http://www.youtube.com/watch?v=E5gRFoPSJPg&feature=youtu.be
    • http://www.youtube.com/watch?v=CTyqmeDR1_E&feature=youtu.be
  8. People have started analyzing the deal and its dynamics
  9. The deal was nationally trending on twitter for a total of 28 hours
  10. Facebook had it covered all across
  11. And finally, business generated by the new customers has paid itself over several times (compared to the cost we bore for the exercise)

A case study indeed. And a good one at that.

Happy to respond to specific questions.

View Answer on Quora

4 Responses to Why is Groupon India selling onions at Rs 9/Kg when the market price is Rs 50?

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Ashutosh Bhardwaj

September 26th, 2013 at 1:57 am

Hi Ankur,

It was definitely the best marketing stunt i’ve seen recently. I want to know how much did this exercise cost you(including onion prices and delivery payments) and how did this idea come up?

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Maja

October 11th, 2013 at 3:26 am

Hehe amazing story! & great business idea!
Embarassed to say had no idea (until i saw the news the other day) onion was such an important vegetable in Indian diet.. Groupon UK should consider doing this deal on tea, then Germany on – beer? Poland on potato, cottage cheese and onions too, and France definitely on cheese and wine :) Seriously speaking nicely done!

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Warikoo

October 11th, 2013 at 4:53 am

Thank you thank you! :)

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Vikas

October 12th, 2013 at 8:49 pm

What the hell your company doing. You sent me defective microwave earlier and on complaining you blocked my account now sent me broken toaster. 2nd time fraud with me ( Groupon code: 0030077Y3A ).
You people are such a disgusting . That’s how you sell onions at Rs.9.

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