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Chinese daily deals site 55tuan, dubbed by some media the "Groupon of China", is becoming the first Chinese e-commerce company to list in the United States in 2015 as it will make its debut on the New York stock market today.
The parent company of 55tuan, Wowo Ltd, which also owns mobile and e-commerce platforms, will sell US$60 million worth of stock on the Nasdaq on February 25 under the stock code WOWO. The company is valued at US$384 million. Wowo's IPO deal comes after Alibaba's record breaking capital-raising on Wall Street late last year, signalling that global investors' interests in Chinese technology and e-commerce companies remains high.
After US deals site Groupon hit a US$1.35 billion valuation in April 2010, dozens of Chinese clones popped up, with TechCrunch estimating that there were more than 100 such sites jockeying for market place at one point.
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This over saturation led to a crisis in the market in 2011, and many sites looked close to failure, including Gaopeng, a partnership between Groupon and Chinese tech giant Tencent. Gaopeng merged with another (more successful) Tencent deals site, FTuan, in 2013, but has continued to struggle.
"After the initial hype wore off, many problems emerged due to lack of regulatory oversight and stiff competition," according to Fudan University professor and media and technology news blogger Doug Young. "Most companies have closed shop or been purchased for bargain prices, costing investors millions of dollars in lost money."
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55tuan has largely bucked this trend, turning a profit in 2012 as other sites were collapsing. According to Tech in Asia, 55tuan is now "one of the country’s top five daily deals sites", with more than 34 million subscribers in 150 Chinese cities.
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