x Abu Dhabi, UAESaturday 29 July 2017

Groupon offers to take the sting out of onion prices in India

Company receives staggering response to offer of onions at 9 rupees as prices in India soar.

NEW DELHI // A discount website offering onions at heavily discounted prices in India has seen an "overwhelming" response as consumers there reel from skyrocketing prices.

Groupon, which offers cut-price deals on everything from restaurant meals to shoes and watches, offered onions at nine rupees (50 fils) a kilogram on Thursday.

By Friday, 8,057 Indian customers had bought the onions. The website had temporarily crashed after 5,000 kilograms of the vegetable had sold.

"The driver behind this is obviously fun. It was meant to generate excitement by selling onions at a knock-down price," said Ankur Warikoo, the chief executive of Groupon India.

The website advertised the deal in a tongue-in-cheek manner, claiming that "people haven't experienced onions in a long, long time" and comparing them to caviar and diamonds.

It was the first time ever the company had put onions on sale and the response, Mr Warikoo said, had been "overwhelming".

"The first day itself we ended up selling 5,000 kilos. Today [Friday] our site crashed completely for 10 minutes. It's been absolutely fantastic."

While food prices have risen across the board in India, the cost of onions had increased dramatically. The spike was caused by supply shortages, with a kilogram costing on average about 60 rupees in some retail markets after prices touched 100 rupees a kilogram in recent weeks.

Market prices of onions "have been a huge talking point", Mr Warikoo said.

"We wanted to sell it at a price that most of us have completely forgotten. This kind of onion price was last seen in 1999."

Customers cannot buy more than one kilogram of onions.

"We deliberately put the cap at one kilo. It is really intended to be something fun," said Mr Warikoo.

High onion costs have become a problem for the Congress Party-led government as it bids for a third consecutive term in general elections expected by May next year.

Onions may not be the most vital source of nutrition but they are regarded as essential to spice-loving palates, which, when dissatisfied, can play a crucial hand in politics.

In January 1980, the late Congress leader, Indira Gandhi, rode back to power on the back of rising onion prices. She waved huge strings of them at campaign rallies and said that a government had no right to govern if it could not control onion costs.

Eighteen years later, an election defeat for the ruling Delhi state government was blamed in part on a surge in onion prices.