Groupon Indonesia hit by KIRF* Complaint

Earlier today we were alerted to a blog post by Bellamy Budiman about Groupon/Disdus selling a knock off product. The product in question is the $30 CableBox Mini designed by BlueLounge. What Disdus is selling is an identical product made by another company, purporting to be BlueLounge's CableBox Mini. Being the fiery personality that he is, Budiman immediately launched into a tirade about the Groupon's practices. Naturally we went directly to Groupon Indonesia to find out its side of the story.

Groupon Indonesia had on its website an offer to sell CableBox Mini for IDR 59,000, (USD 6.20). For a $30 product, that sounds like an awesome deal but Budiman noticed that something doesn't add up, so he asked BlueLounge regarding its product being sold at Groupon. As it turns out, BlueLounge doesn't sell its CableBox Mini through Groupon and it also mentioned that it's facing a similar issue with Amazon.

Groupon's response to Budiman was that it only sells original products as offered and placed for sale by the distributor. With regards to BlueLounge's statement, Groupon's position is that it places the responsibility on the customers who are free to purchase or not purchase products on offer through Groupon Indonesia's website. From this exchange, Budiman concluded that Groupon Indonesia turns a blind eye to knock off or counterfeit products.

We contacted Groupon Indonesia for a response on this issue and received a reply from Yogen Suganda, the company's managing director. He said that Groupon strive to "give the best deal for our customer[s] daily. One of the way[s] to get good quality product at a low price is to offer direct-from-factory (a.k.a OEM product) that has no branding on them."

He pointed out that similar products are sold through Amazon and Alibaba and likens the situation to how jeans are not exclusively made by Levi Strauss. An analogy which we find amusing because BlueLounge differentiates its products in the market through its own designs while Levi Strauss is not as design oriented.

General Motors and Ford both make cars but while their products serve the same purpose, they're identifiable by designs and there's very little chance that people will mistake a Ford for a Chevrolet for example.

The world of consumer products, especially electronics and accessories, is a very murky one. Certain products could be fakes or counterfeits but others could be made by the same manufacturer, just sold unbranded or branded differently. It can be a challenge to prove infringements and determining responsibility may also be a steep hill to climb.

This is obviously an issue not isolated to Groupon. As noted from the exchange, Amazon is also affected by this and so do many other online stores. While fakes and counterfeits are clearly illegal, OEM products may not be. Mobile phone cases and iPhone USB cables are perhaps the easiest examples to note in which unbranded versions are freely sold for large discounts on online stores such as Amazon and ebay.

Here is the full response from Groupon Indonesia, reprinted verbatim:

We at Groupon strife to give the best deal for our customer daily.One of the way to get good quality product at a low price is to offer direct-from-factory (a.k.a OEM product) that has no branding on them.Regarding the product the we feature and was questioned by Mr. Bellamy Budiman is the same as above, original OEM product.Doing a little bit of research, the mentioned product is actually also sold worldwide with many other different branding:http://tinyurl.com/bf38b9khttp://tinyurl.com/bybawueSimilar case can be found on our everyday product such as Jeans.http://en.wikipedia.org/wiki/JeansEven though it was invented by Levi's, we can find many other branding of Jeans whether OEM or not.Merchants and Suppliers are rigidly screened daily to make sure that we at Groupon never sell any fake or counterfeit product.Let me know if you have any further questions.Warm Regards,-- Yogen SugandaManaging Director

*KIRF: Keeping it real fake

[Image from BlueLounge]