Working in the South African online group buying industry shows one that companies come and go in the digital world. And in a sense, that is fine: “Try out new things, see what works” is what Jim Collins tells us in his book Good to Great. However, with that culture of innovation comes a responsibility to clients, customers and the like.
Recently on www.groupbuying.co.za, it was announced that a group buying site called 247deals had closed, and “done a runner” – they had shut shop and were not paying out anything to anyone. Customers sit with worthless coupons, while small businesses have failed advertising campaigns and angry consumers at their doors. It has happened before – Dealio closed its doors in 2011 and were never seen again. Possibly some of the smaller group buying sites did the same thing to a lesser degree.
The site ITWeb reports in more detail on the event, having contacted some of the employees of 247deals.co.za personally. They blame conmen hitting on the site with fake deals and clearly, did not vet their deals well.
The 247deals site seemed good, with a proper layout, payment systems, lots of deals, mobile site and much more. Someone mentioned they even had an app. Someone else mentioned they had investment. Perhaps they spent too much money too quickly like Naspers’ Dealify. Perhaps they simply didn’t sell enough through all their channels. Whatever the case, things were not working out, and in that event, one has to close down.
But the story isn’t really about 247deals. The truth is, as a business your responsibility still remains to end off properly. Recently on NoPicketFence.co.za a question was asked about losing all your investor’s money – and it must be said that whatever happens in business, you are required to take the full brunt of the blow.
In China, the government had to step in during the days of group buying hype and regulate the new daily deal start-ups, since many of them would open for a week, collect money and then shut down without a care to vendors or customers. This should not be the way we have to go in South Africa.
Let’s hope we don’t see any more group buying sites (or online businesses in general) close down without covering their clients first. About the author: Jess Green is a digital entrepreneur, passionate about tech, web and mobile. Follow him on @jessello. Disclaimer: Jess is works for group buying website UbuntuDeal.