Groupon's chief goes amid more complaints

Groupon Middle East has parted ways with its second chief executive in less than six months as the daily deals website struggles with a flood of consumer complaints both regionally and internationally.

The United States-listed media giant offered its first UAE promotion in March last year, but has since struggled to compete against local peers, reshuffling management in August and again making changes last week.

Globally, Groupon's business has come under fire after it was accused last week by a UK regulator of misleading consumers and given three months to clean up its practices.

Simon Pugh, a senior account manager at Groupon, confirmed the departure of Ainsley Duncombe, the chief executive of the Middle East, and said Alexander Kappes, a vice president, was now acting as head.

"Yes, Ainsley has left the company. Alexander Kappes is acting chief executive," he said. He declined to comment on whether Mr Duncombe had left because of complaints about the site.

Mr Duncombe co-founded the discounts site LowCostDubai.com before taking up his position at Groupon Middle East last August. He declined to comment on the reasons behind his departure.

Groupon has left swaths of customers waiting for more than two months for products they purchased online. It has been inundated with complaints on Facebook, with consumers bemoaning poor service.

Ross Jackson, 31, a Dubai resident, waited nine weeks for his iPad accessories to arrive and said he was also berated by Groupon staff for accusing them of deleting his complaints from Facebook.

Mr Jackson said he asked Groupon if it had deleted his complaints on Facebook and claimed a Groupon representative posted the reply: "It's right below, can't you see it, even a blind man can see it there."

"It's not the customer service you expect," Mr Jackson told The National. "I understand I made a mistake but do you really want to talk to customers like that? I'm not sure I would go through the hassle [of ordering] again."

A number of customers have previously accused Groupon of deleting complaints on its Facebook page.

Complaints about the daily deals site began last year when the Middle East division botched an attempt to source products cheaply abroad and have them delivered to the region. Using its vast buying power to agree cut-price deals globally, the promotions website then failed to ship the products on time to the region.

"I have been asking for a refund for three months now … and I am not getting any response … really I do not even know why are you operating … you have time to update your Facebook pages but no time to solve your customers' problems with your stupid deals," said one customer on the Groupon UAE Facebook page.

In August, Mr Duncombe replaced Faisal Haq, who was previously the managing director of Groupon Middle East.

But Groupon struggled to compete with the market leader Cobone.com and LivingSocial.com which bought out GoNabit.com. Also other smaller group-buying websites in the Middle East are all fighting for business.

Gaurav Sinha, the managing director of Insignia, a brand consultancy,said the group-buying concept had value in the Middle East, but it needed to ensure it was transparent with customers to avoid being branded "dishonest".

"Something like this can create an absolute brand hijack if they cannot maintain what's being offered in an efficient manner," he said.

Groupon, which launched a US$13 billion (Dh47.75bn) initial public offering on Nasdaq in November, is among the biggest players in the US, but has found trading in new markets difficult.

In the UK, the Office for Fair Trading last week found it had broken laws relating to advertising, pricing, inaccurate offers and unfair terms. The company could face enforcement actions by UK courts.

In India, the founders of SoSasta.com, Groupon's acquisition in the market, left within a year, according to reports. The website in India also leaked customer information last June.

Gaopeng, Groupon's joint venture in China, also laid off staff last year in the face of competition from other players.

rjones@thenational.ae

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