Firstly, selling any commodity for 10-15% of its market value will attract lots of opportunistic buyers. This isn't an "Indian" thing. You could try this in other countries by selling, say, Kale or Chicken Breast or Soylent, and people would still sign up. A deal's a deal in every country.
Secondly, Groupon was selling 3000 kg per day, with a limit of 1 kg per order. Some sites mention they sold out the first day within 80 minutes. Other than that, I haven't seen any evidence/data about the incoming traffic that caused the site to crash. So till I do, I'll treat news of the "crash" like a marketing gimmick from the company.
Lastly, as other folks have commented, Groupon India isn't exactly the platinum standard for ecommerce website design or operations in India.
In 2011, they (specifically, the Indian company they acquired and later folded into Groupon India) leaked 300,000 user passwords that were stored as cleartext (http://www.theregister.co.uk/2011/06/28/groupon_india_privac...)
The same year they decided to rebrand themselves to Crazeal.com (http://techcrunch.com/2011/10/03/no-groupon-in-india-company...), only to re-re-brand themselves as Groupon India in Nov 2012 (http://www.afaqs.com/news/company_briefs/?id=55477_Groupon+I...)
Given this history - of poor design, senseless acquisitions and multiple u-turns in strategy - I wouldn't be surprised if their code is a taped-up patchwork that will crash regardless of 90% discounted onions.