Customer complaints about delays and defective products pile up against online group buying sites such as SoSasta and SnapDeal, but these are simply ignored

It wasn't long ago that group buying and discount cards promised to become the next big thing to happen to the Indian consumer.

Almost everybody who was in business, be they banks, mobile phone and credit card companies, travel sites and online retailers, all felt obliged to ply consmers with third-party discount coupons in order to retain loyalty.

Then there were group buyers whose business model was to nudge customers to those products and services that offered hefty discounts. From SoSasta (of Groupon) to Jasper/ Moneysaverprime/Snapdeal (all part of a single business group) and mydala (funded by naukri.com), Dealface (promoted by consumer review site MouthShut.com and the global Groupon- the choice list was long.

All of them were funded by private equity players and venture capitalists, which meant that revenue and profit was never a concern; the name of the game was customer acquisition. Today, the price of a book purchased through these online stores is usually less than the cost of the fancy packaging and courier charges!

However, hardly has the business begun to stabilise and the complaints are seeping through the cracks. Moneylife wrote recently that the issues with SoSasta have become more of a buzz in cyberspace than the deals it is offering. Till three months ago, Jasper was working overtime to woo corporate customers with bulk deals on its MoneySaver card. But now we hear from the company that it is "no longer issuing new MoneySaver cards". The group has also stopped offering coupons and has widened its scope beyond the e-commerce site www.snapdeal.com that offers the biggest deals on spas, salons and restaurants.

Experts argue that the business model of group buying sites is unsustainable and they criticise the poor consumer redressal mechanism. Moneylife's experience with SoSasta is proof of the extent of the callousness of the company to customer complaints about delay in receiving products or about defective products. (Read, 'SoSasta customers complain about delivery delays, defective products; company ignores complaints'.)

While writing the report, we emailed the company on 12th September for its response on the complaints. Two days later, we received an automated reply from one Kavita who said that the "complaint had been forwarded to the concerned department". Clearly, the email wasn't even read and no attempt was made to separate a complaint from a media query.

A couple of days later, we received another email from SoSasta. This one assumed that our "complaint" was redressed and said, "We'd love to hear what you think of our customer service." It also asked us to "rate the support you received : Good, I'm satisfied, or Bad, I'm unsatisfied". We think the customer service falls into another category altogether - bizarre!

SoSasta is backed by Groupon, the world's largest online group buying business, that was recently involved in a controversy after it admitted that its entire database was 'accidentally' leaked over the Internet and indexed by Google. (Read, 'Groupon's SoSasta.com leaks entire database from India'.)

Group buying and discount cards exist around the world and it could well be that the business in India is facing teething troubles and will stabilise. But until it does, customers must learn to treat the offerings like a lottery-if the offer works it is money saved. Otherwise, wait for the next one that comes along. It doesn't really matter so long as you don't make the mistake of forking out an annual fee for a standalone service that may not be standing anymore!