Over the New Year's holidays, Groupon Japan sold traditional New Year's dishes to the Japanese. It didn't go well. In fact it went so badly that dozens upon dozens of people complained about fraud and then the Japanese government actually stepped in and is currently investigating the situation. So, I guess I should say it was a disaster.
This has been very damaging to Groupon's reputation in this country. I think the Japanese are not forgiving when it come to this sort of fraud - especially when it deals with food. Now Groupon is making it worse by adding insult to injury.
Probably the Groupon people are unaware of the scandals with poisoned gyoza and other food imported from China. That episode set back Chinese food businesses exports to Japan at least 10 years.
Now the Chinese food companies have to start over.
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This is a photo of the New Year's dish that Groupon advertised
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This is a photo of what was delivered taken by
a furious ex-Groupon customer.
Then the CEO of Groupon has the audacity to make excuses and say,
"We we're too busy to fill the orders"
No. This looks like blatant fraud.
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What happened with Groupon for the traditional New Year's dishes is that Groupon advertised gorgeous dishes for a really low price. But, as is often the problem with catalogue or online ordering, the product doesn't look anything like the the advertisement. So people were furious.
In fact, it looked like obvious fraud.
This sort of bait and switch is bad enough, but when you deal with people's food, then you are dealing in an area that could conceivably destroy your business. Now Groupon is doing a lame attempt at damage control. Way too little, too late and completely lacking in respect and understanding of Japan and Japanese people.
As Wall Street Journal reports:
Doing business in Japan can be a, well, tricky business. Just ask Andrew Mason, CEO of exponentially expanding online discount specialist Groupon, who ended up posting a personal apology video to customers here on YouTube after a flub in orders for Japan's prized traditional new year's meal. Certainly, Groupon Japan appears to be learning to offer local deals that have specific local appeal. One of the more exotic deals on offer is a chance to take in a "new-half," or drag, show in Tokyo's central Roppongi district, currently going for 56% below the 20,000 yen going rate. About 240 Grouponees have purchased the ticket for 8,800 yen.
I spoke to an online promoter and marketeer here in Tokyo yesterday named Will Thompson and he told me that Groupon is not doing that well in Japan and that the Groupon hype is just that; hype. Judging from what I have seen and the chatter on the Japanese language Blogosphere, I am beginning to agree.
Here is the CEO of Groupon making the horrid mistake that all foreign management makes in Japan: Not immediately apologizing repeatedly and following that up by making excuses. He doesn't seem to understand the gravity of this situation.
Sorry, pal. No one wants to hear your lame and dumb excuses. This is a royal FAIL!
Mr. Mason, you are not making an excuse to your share-holders. You are not trying to sell us on how great your company is; you are supposedly apologizing to Japanese families whose New Year's celebration 2011 you ruined... You know what? New Year's 2011 only comes once in a life time. Even someone obviously as out-of-touch as you are should be able to understand that.
This guy is clueless about Japan. A good apology would have gone like this; "I am very sorry that this happened. It is all my fault. This will never happen again." Then bow your head and shut up. Then send some real apology's to customer's and coupons for, say, ¥50,000 ~ ¥100,000 to each customer - and not blab that to the media because, if you did make your efforts public, you'd look even more insincere than you already do.
The problem was not only late deliveries and damaged product, the biggest complaint was people getting a product that doesn't look anything like advertised. But he goes on to make lame excuses and not telling the whole truth. The best one is when he says, "We are very sorry. We apologized many times. We sent ¥5,000 ( about $60 USD) gift certificates and will make sure this doesn't happen again."
¥5,000 yen certificates!? Wow! Classy, Groupon! Classy! If you ruin my New Year's holiday next year, can I get ¥10,000? ($120 USD).... Are you kidding me? A stinkin' ¥5,000 yen for wrecking my New Year's feast? Can you also kick or slap me when I accept your crummy coupons?
¥5,000? That's an insult!
Kevin Bacon from Animal House after buying stuff from Groupon:
"Thank you sir. May I have another?"
"Thank you sir. May I have another?"
He says, "We will make sure that this never happens again" and a few seconds later, he says, "Things like this have happened before." Is this guy for real?
From reading the article on Wall Street Journal and the bizarre example of selling a mere 240 tickets to a show that caters to transsexual and transvestite fans, I have to wonder about the viability and common sense of the management of Groupon. I mean, get serious. 240 tickets to a drag show? After a scandal with people accusing you of defrauding the public in a food related incident?
Sorry, Groupon, traditional New Year's dishes are like Turkey on Thanksgiving to Americans... You don't screw these things up. Service is what Japan is famous for. Your service is a joke.... You make excuses that "We couldn't fill the orders"? Oh really? So you couldn't fill the orders so you thought it was OK to "send something" anyway? What a crap excuse for lousy business.
If I ordered a roasted thanksgiving turkey for Christmas, but the restaurant couldn't handle my order, you think it's OK for them to send me Kentucky Fried Chicken instead? Preposterous.
Then you actually have the gaul and foolishness to brag to Wall Street Journal about selling a lousy 240 tickets for a show full of drag queens? Pardon my French, but how foolish can you get?
In spite of the nonsense you've read about Japan, transvestites and drag queens are not main street interests and concerns. You know, most Japanese have families and regular jobs to think about... You know, Main Street concerns... Funny that.
My personal opinion is that Groupon has already crossed the line into the forbidden zone here in Japan by allowing this fraud to happen with people's food. Now they top it off with this idiocy about an alternative lifestyle show in Tokyo? And this piss poor excuse video?
Either the CEO of Groupon needs to fire his advisor on Japan or he needs to have his head examined. He certainly needs to learn some humility. If you do not understand Japanese culture and common business practices and norms in Japan, you shouldn't be doing business here.
Compare the difference in quality between a company like Groupon and Apple. How would Apple have handled complaints like this? With lame excuses that obviously fail to understand or address Japanese cultural concerns or with a solution that would make people say "Wow"?
If you keep up this nonsense, Groupon, you soon won't be doing business in this country. The Japanese language Blogosphere is ablaze with comments against this company and it's shoddy business already. Once this video gets around, they'll be jumping on you for that.
You blow the New Year's dishes. Make an apology video that has a blatant lie in it; "delivered late and damaged!?" How about "....delivering a product that was nothing like what was advertised?"
On top of this, the video seems terribly insincere... What's the word for it? Pompous? Yeah. That's getting close.
Groupon has lost tens of thousands, if not hundreds of thousands (more?) Japanese customers with this. This story was and still is all over the country. Everyone knows this. Everyone is either disgusted with groupon or laughing at your incompetence. I, for one, will never order from Groupon.
Groupon needs to get their act together really quick. There are thousands of bloggers just like me (many in Japanese language) who are just waiting for you to blow it again.
Judging by how you've handled this mess, I'm sure you won't make us wait too long.
Read Part Two of How This Affair Should Have Been Handled by Groupon. A Lesson for all Western Businessmen Thinking of Doing Business in Japan.
UPDATE: I also noticed that what the CEO says in English is not the same as what is written in Japanese subtitles. Here's a detailed explanation.
Note: Thanks to News on Japan for some links. No thanks to News on Japan for not taking this fool CEO and his company to task for fraud and unscrupulous business practices... I know why News On Japan doesn't take a stand, though.... They have few advertisers so they need Groupon.... Duty to readers takes a back seat to getting money from sponsors, regardless of how shady those sponsors dealings are.
Think about this NOJ; Maybe you have no advertisers because you lose credibility with readers for a poor job. This is twice in 5 days that I have taken you to task for not doing your job.
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