Groupon prepares to go into China

By Dow Jones Newswires-Wall Street Journal
Posted Feb. 21 at 5:41 a.m.

Deals Web site 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

The Web site, which appears to come from a Chinese phrase meaning “cherished friend sitting around the table,” is listed as registered by someone at Internet giant Tencent Holdings Ltd., of Shenzhen, China, a 10 percent 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 Web sites are racing to take advantage of the growing popularity of group discounts on the Internet.

One China-based group-buying search engine,, estimates transactions on such websites will surpass $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 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.

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  1. EHF Feb. 21 at 8:02 a.m.

    I was shocked to hear the groupons will not become active until at least 1 billion people purchase the deal.

  2. Sally Feb. 21 at 9:02 a.m.

    People say that groupon is losing its value but i think goup on is flying high! site is getting increasing greater no. of visitors day by day only because of their user friendly deals of all kinds especially for the discount hunters…and you can see people are cloning groupon type of sites …thats a fact but they can never provide services as good as groupon i bet on that!

  3. HeyNow Feb. 21 at 12:52 pm

    I wonder if there are enough spas in China to service all the Groupon customers. That seems to be the only Groupon deals.

  4. knowsbetter Feb. 21 at 5:08 pm

    So do you get 1/2off of a ridiculously low price?