Groupon begins Chinese operations

Updated: 2011-03-01 09:41

By Edwin Chan and Melanie Lee (China Daily)

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Groupon begins Chinese operations

The Groupon Inc website is arranged for a photograph in Beijing on Monday.[Photo / Bloomberg]

LOS ANGELES/SHANGHAI - The daily-deals website Groupon went live in China on Monday, bringing its popular brand of Internet retailing to the world's most populous nation.

Its portal,, is funded by Groupon, the Tencent Collaboration Fund and Yunfeng Capital, and will begin accepting e-mail registrations from local consumers, with daily deals promoting local merchants to debut in March.

However, analysts have questioned how successful Groupon's Chinese venture can be, given the large number of group-buying websites that are already active in the country.

"Discounts will always be popular but the question is, will Groupon be more popular than the other websites," said Paul Wuh, a Hong Kong-based analyst with Samsung Securities.

"There are many entrenched companies already offering this product," Wuh added.

Taobao, China's largest consumer e-commerce website, launched a group-buying website last year, while other sites such as Mei Tuan and Man Zuo have also sprung up. Popular portal websites such as Tencent's QQ and have also launched group-buying websites.

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China had almost 19 million group-buying users at the end of 2010, according to government statistics.

Wuh said the move is generally positive for Tencent as it signals that China's largest Internet firm is further expanding its operations.

Groupon had been widely reported to be scouting out locations and workers in China, seeking the global expansion its many rivals have yet to embark upon.

Groupon, a two-year-old start-up that has met bankers about an initial public offering and which sources say rebuffed a $6 billion advance from Google Inc, has seen phenomenal growth.

It has grown to about 50 million users across 500 cities in 40 countries in 2010.

But the competition is intensifying, with the likes of LivingSocial expanding in the same space and a plethora of websites springing up globally that specialize in deals for niche markets.

Groupon recently completed a $950 million round of financing as it ponders an IPO, which sources have said would be one of the largest technology offerings of 2011.

Its venture-capital backers and late-stage investors include Andreessen Horowitz, Battery Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, Group, Maverick Capital, Silver Lake and Technology Crossover Ventures.



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