Kal Raman, Global COO of Chicago-based deals and discounts site Groupon, is reportedly one of the strong contenders to lead the company, after its CEO Andrew Mason was asked to step down last month. But Raman, with over 20 years of experience in retail with stints at WalMart, Amazon and eBay, is unfazed by the attention around him. “My job is to focus on improving customer and merchant experience and building the local commerce category,” says Raman, visiting Groupon’s new R&D centre in Chennai.
Tirunelveli-born 45-year-old Raman, an alumnus of Guindy Engineering College in Chennai, spoke to Business Line about the road ahead for Groupon and the potential India holds.
You have been with Groupon for just nine months. But you are already one of the strong candidates for the top job…
The CEO race is more for people outside than those inside. We don’t talk about it. Groupon needs somebody operationally savvy, who can manage a complicated multinational business. And the board will take the right call.
Groupon has been under fire for sometime over dipping shareholder value, accumulated losses and earnings repeatedly missing street expectations. How will you lead the company’s turnaround?
These are true, but I won’t say Groupon needs a turnaround. In 2012, we made $5.4 billion in billings and $98 million profits, growing over 2011. We are also sitting on $1.2 billion of cash. The US market is good, but international markets are not as efficient as the US in terms of delivery, return on investment and productivity. Right now, we are focused on executing the strategy for 2013 – work on customer and merchant experience and build awareness across all markets. We are also bullish on mobile commerce.
Have you ever thought of changing your model, which is a mix of group buying, deals and discounts?
We have evolved. In 2008, Groupon used to be a daily deal site, engaged in an e-mail blast of the same deal. Now, we offer many curated deals. Our smart algorithm works out who needs what deals at what time. We are trying to intercept consumer demand. But our core focus will remain offering small-time merchants and businesses the power of technology.
In India, several deals and group buying sites have shut shop or have been gobbled up by bigger players. Does this bother you?
No. The addressable market is huge with 300 million middle-class people. Everyone has got connectivity and expendable income. After one gets the pay-check and pays up the mortgage, the first thing one does is eat outside. Then you do a manicure or pedicure, and then a leisure activity. With the money left, you go on a vacation. Groupon operates in all these categories.
India is skipping the PC revolution and directly going to mobile. Groupon is ideally suited for this – we will launch our mobile app soon in India. You need patience in a market like India. We are not looking at India as a short-term solution.
Groupon entered India in 2011 by acquiring sosasta.com. Are you looking at acquisitions in India?
We are always looking at companies with technology skills and businesses which are complementary to us – food and beverage, online ordering and fashion.