There's somebody else taking the wheel in Indonesia for Groupon (NASDAQ:GRPN). The daily deals leader is unloading Groupon Indonesia to Malaysia's KFit Holdings, a fitness sharing program that recently expanded its offerings to include beauty and wellness categories. Terms of the transaction weren't disclosed, but Groupon is getting a stake in KFit Holdings.
Groupon Indonesia has 1 million subscribers and more than 15,000 participating local merchants, but Groupon has struggled to grow internationally at a time when its focus remains on growing closer to home.
It announced last summer that it would be laying off 1,100 employees from its international offices. It was assessing its presence country by country, and its stated primary objective at the time was to ensure that every country that it's doing business in is making money for Groupon and strategic to its long-term mission.
Closer to home
Monday's move to hand over Groupon Indonesia isn't exactly a surprise given the baby steps that it has taken out of certain international markets. Putting more of its eggs in the stateside basket also isn't necessarily a bad thing.
Groupon delivered $1.467 billion in gross billings in its latest quarter, 5% below the prior year's first-quarter tally. However, that financial performance could've been worse. There was a 5% year-over-year uptick in North America, partly offsetting double-digit percentage declines overseas. The majority of its workforce was international a year ago, but 64% of its revenue is now being generated in North America.
Losing a million accounts in Indonesia doesn't sting as much when you consider that it's sitting on 26.9 million active customers closer to home. In fact, it gained nearly as many customers as it has -- or had -- in Indonesia during just the first three months of the year.
Groupon's stock has been all over the map. It plunged 76% in 2012, its first full year as a public company. It went on to more than double in 2013, only to get slammed in 2014 and 2015. It's beating the market so far in 2016, but the shares are so volatile that it's always too early to call the year a failure or success.
It isn't in a hurry to shake up its international shortcomings. Groupon's still flush with post-IPO cash, armed with $688.5 billion in cash and no long-term debt. With improving margins on its Groupon Goods business and a chunky Rolodex with 700,000 active deals, you can't write Groupon off -- even as it writes off some of its subsidiaries.