It’s hard to believe that a few trays full of snacks could break an entire company, but in Japan it’s been known to happen. The more popular the company in the West, the more likely it is to happen.
First you have to keep in mind that Japan is one of the only countries where Nokia failed; where Blackberry never caught on; and where Ebay failed (although that’s because the Japanese had yet to discover credit cards and accessed the internet over their cellphones).
A few years back Groupon attempted to get a foothold in Japan. It had some early success, but the Japanese were always rather suspicious of it. The Japanese don’t necessarily clip coupons and because prices for the same item tend to be the same from store to store, they aren’t used to shopping around. In fact, the only coupons they regularly use are those offered by McDonalds and other fast food places through smartphone apps.
Groupon’s early success came with a lot of problems. Clients complained about the number of “coupons” being offered versus what they thought would be offered and that there was little repeat business from coupon users.
The killer, though, came over New Year’s snacks. One of Japan’s staple New Year’s traditions is the serving of Osechi, which is a kind of tray of snacks that remind me a lot of the Hickory Farms cheese and sausage and cracker sets people used to buy as last minute gifts. (And, for all I know, may still buy.)
The osechi is set out before dinner and consists of random cold foods, including chestnuts, spicy shrimp and teriyaki chicken. Although there is some variation, there are also several traditional foods expected in each tray.
Groupon sold a coupon for osechi and apparently enough people signed up that it broke the provider. Rather than cancel, the provider sent half-filled trays, some with single slices of ham from a plastic package from the grocery store, some with things that were flat out gross.
The angry reaction was big enough that it began to hurt Groupon. As I’ve said before, no one piles on like the Japanese press. They found every complaint ever issued against Groupon and interviewed lots of unsatisfied customers.
This prompted the CEO of Groupon to say something resembling an apology via a video. The backlash against this was bigger than the osechi scandal. To point out the biggest issues:
Second: His attitude was one part dismissive, one part “besides, it’s not my fault” and one part “Lighten up, Francis.”
Third: Clearly no one had briefed him about how big a deal New Year’s celebrations are in Japan.Christmas is no big deal. New Year’s is to the Japanese what Christmas is in the West. If you’re in the USA, add both Christmas and Thanksgiving to get the importance.
Fourth: Clearly no one had briefed him about the importance of apologies in Japan. As I’ve mentioned before, you can accidentally kill people whilst joy-riding in a submarine and an apology will help turn the public to your side here in Japan. If he’d come to Japan in person and done a proper apology and then spent a lot of money to make things right, Groupon might still be around.
Instead, the fall out was brutal. Groupon is gone from Japan and almost no one has attempted the group coupon model again.
Luckily, osechi is still around. I’ll be enjoying it (whilst fighting for the Chili Shrimp) tomorrow.