Groupon Gears Up to Expand Into China
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BEIJING—Deals website Groupon Inc. appears to be making preparations to start operations in China, a move that could shake up the market for group buying, even though challenges lie ahead for the young U.S. company.
Chicago-based Groupon, which opened in 2008 selling discounted products and services from local merchants such as restaurants and nail salons, faces a huge Internet market that has confounded some of the world's biggest players.
China has more than 450 million Internet users, more than any other country.
In a Beijing office adorned with a large Groupon sign, staff are conducting job interviews. A person in the office on Saturday said the company operates Gaopeng.com.
The website, which appears to come from a Chinese phrase meaning "cherished friend sitting around the table," is listed as registered by someone at Internet giantTencent Holdings Ltd., of Shenzhen, China, a 10% stakeholder in Russian Internet firm Digital Sky Technologies, one of Groupon's backers.
Groupon would be entering a market as hundreds of other domestically run websites are racing to take advantage of the growing popularity of group discounts on the Internet.
One China-based group-buying search engine, Tuan800.com, estimates transactions on such websites will surpass 16 billion yuan ($2.4 billion) this year.
Though well-established U.S. companies including Google Inc., Yahoo Inc. and eBay Inc. have opened sites here, Chinese companies such as Alibaba Group and Baidu Inc., with their limited international reach, dominate the market, which is fast-growing but tightly regulated.
Meanwhile, job listings for sales, marketing, finance, customer service and other staff for Groupon have been posted by headhunters on Chinese job and university sites in recent weeks. "The largest group-buying site is hiring in Shanghai!" the ads say. "Groupon is the fastest-growing company in history… and it's now starting its Chinese company."
Ye Hongna, a Groupon spokeswoman based in Beijing, declined to comment. Tencent couldn't be reached.
Groupon raised eyebrows with its controversial Super Bowl commercials this year, particularly one that poked fun at the political situation in Tibet. The ad features actor Timothy Hutton narrating a mock public-service announcement about Tibetans being "in trouble, their very culture in jeopardy," that becomes an ad for a Groupon deal on Tibetan food. Copies of the commercial quickly appeared on Chinese websites with subtitles, drawing criticism from Internet users who said it was offensive and showed the company's ignorance about China.
Meanwhile, references to the social situation in Tibet are considered taboo in China, where regulators often require discussions of Tibetan independence to be removed from domestically operated websites. If Groupon opens a Chinese site, it will need regulator approval. >> Continue Reading
