Groupon partnering with Tencent in China

By Dow Jones Newswires
Posted Feb. 28 at 5:54 a.m.

U.S. deals Web site Groupon Inc. said Monday it is teaming up with Chinese Internet giant Tencent Holdings Ltd. to launch a group-buying services Web site in China, placing it ahead of other major U.S. social Internet companies in building a China presence.

For Chicago-based Groupon, the deal represents an ambitious attempt to expand overseas while for Shenzhen-based Tencent, it is an attempt to tap further into growth beyond the company’s core business areas of online gaming and messaging.

Groupon’s move could also prompt other U.S. Internet companies to redouble their efforts to enter China, a traditionally difficult market to penetrate for reasons including a haphazard regulatory landscape. China continues to block access in the country to Facebook and Twitter, two other U.S. social internet companies drawing strong buzz, apparently because Chinese censors are unable to control or regulate content on the overseas websites. Groupon’s move will also add to rising competition in China’s nascent but fast-growing market for group-buying services, where more than 1,000 Chinese services launched in the past year.

Groupon’s announcement comes as Alibaba Group Holding Ltd.’s online marketplace, Taobao, said last week it will promote local businesses on its group-buying website. Taobao said it has agreements with ten other Chinese group-buying websites to include their bargain offerings on its platform.

Groupon said in a statement that the new site,, will offer its customers discounts at shops in China via daily emails. The service will initially cover Beijing and Shanghai before expanding to other cities, it said.

“The collaboration combines Groupon’s global group-buying experience with Tencent’s in-depth knowledge of Chinese online communities,” the statement said.

The website is currently accepting user registrations and will begin delivering deals to users in March, the statement said.

The website is funded by Groupon, a Tencent investment fund called the Tencent Collaboration Fund, and Yunfeng Capital, a fund founded by Alibaba Group Chairman Jack Ma along with other investors. Yahoo Inc. owns a roughly 40% stake in Alibaba Group.

According to the China Internet Network Information Center, China had 18.75 million group-buying users by the end of 2010, and the category is likely to have “rapid growth” in 2011.

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  1. JoeJack Feb. 28 at 2:12 pm

    So… what’s groupon going to do about the company called “groupon”? They’re squatting on the domain name and have 2000 employees in 368 cities aping the groupon site/model.

  2. EdenPURE March 1 at 2:18 a.m.

    Groupon is expanding very very fast. Especially in Asia. Their strategy is everything must go fast. When they reach one country here are the steps: 1 Start to contact the media companies and HR companies 2 Give Double salary to recruit the people that already in the Groupon business, for instance IT, sales, etc. 3 The new recruitment is encouraged to bring their team into Groupon, so the team expand very fast. That really hurt some local Groupon companies. 4 Start to see their ads when you take subway, bus, etc. They use this way and get success in Japan, Singapore, and now in China. But I think it’s too early to judge it will success or not, quick expansion will surely bring management problems later. Hope they don’t mess up, they really bring some good opportunities for small business people.
    There are lot of people they have purchased Groupon Clone from to start their local groupon business with the lowest start-up cost, and already doing well. To get as big as Groupon, that’s dream, but those people they have good connections with local SPAs, restaurants, that brings them the first group of good deal and traffic really fast. It’s not hard to start a groupon business as before. Before, you need to spend thousands to develop a site, now just few hundreds and your sales people can start to get the good deals.
    Looking forward to see groupon and local groupons get really strong!