Groupon bargain site launched on mainland
Online daily deals provider Groupon, backed by funding from local industry leaders, went live on the mainland yesterday offering discounts to consumers through its newly launched group-buying portal, GaoPeng.com.
It marked the US-based Groupon's most ambitious expansion in the Asia-Pacific, with the mainland now the world's second-largest economy and home to its biggest internet population, at 457 million users as of December. Groupon entered Australia, India and Malaysia earlier this year; Hong Kong, Taiwan, Singapore and the Philippines last November; and Japan in August.
GaoPeng.com, headquartered in Beijing, started accepting e-mail registrations from local consumers, promising daily deals with local merchants from this month.
Subscribers will get free daily e-mails alerting them to the deals. The service will initially cover Beijing and Shanghai, with plans to extend to other mainland cities. 'We are excited to be in China, collaborating with a leading internet company and respected business leaders,' said Andrew Mason, the founder and boss of Groupon.
Start-up capital for GaoPeng.com was provided by Groupon and the Tencent Collaboration Fund of mainland internet giant Tencent Holdings and major private equity group Yunfeng Capital, which was set up by more than 20 local entrepreneurs, including Alibaba.com chairman Jack Ma Yun.
Mason said that support from high-profile backers would help 'bring unbeatable deals from top local businesses and create new revenue streams for merchants'.
Founded in Chicago in November 2008, Groupon features a daily deal on the best things to do, eat, see and buy in more than 500 markets around the world.
Groupon's business model is based on the principles of collective buying. The company negotiates discounts with popular businesses and shares them with subscribers via free daily e-mails.
Groupon claims that its innovative approach to e-commerce has generated savings worth more than US$1.5 billion as of February 10 for consumers in 41 countries.
The deals are activated only when a minimum number of people agree to buy, encouraging subscribers to share the promotion with family and friends. By guaranteeing businesses a large number of new customers, Groupon has created a powerful new marketing vehicle for local merchants in cities worldwide.
On the mainland, GaoPeng.com combines Groupon's global group-buying experience with Tencent's in-depth knowledge of Chinese online communities.
Tencent, the mainland's leading online games operator, has the country's largest online community, with more than 600 million actively using its QQ instant-messaging software.
'A partnership with Groupon would help Tencent gain meaningful market share in a fragmented group-buying market,' a report from JP Morgan Equity Research said.
Many mainland entrepreneurs have tried to emulate Groupon's success since last year, resulting in hundreds of copycat websites on the mainland that promote tuan gou, or group buying.
Can't say no
Groupon says its service generates savings and attracts business
The accumulated value of discounts for consumers using Groupon in 41 countries, in US dollars: $1.4b