Groupon Coming Fast Into the Chinese Market, will it succeed?

In china business, websites by Michael Michelini2 Comments

Yet another foreigner coming to China to make quick money in the biggest population internet users! To give you readers the background story, I think many of us in the internet world hear about Google trying to buy Groupon last month for like 6 billion US dollars (I’m too lazy to find PR links), only to then turn around and get almost a billion dollars in private placement investment (approx 950 million us dollars).

Seems a lot of that money is going towards international expansion outside of the US market. And…….CHINA seems to be red hot on their list………so many of my friends have been chatting about it the past week or so…..job offers flying around, offices opening…..

Will they be another eBay? Coming into China and trying to copy/paste their technology and translate it into Chinese? Or like Google and stop listening to Chinese government and un-filtering their results? Or will they try to do it like Yahoo China, and instead do an equity swap with a Chinese internet company like Alibaba and hand over daily operations for a minority stake?

My friend Marshall Taplits at Shenzhen Standard just published a great layout of the current group buying marketing in China and how Groupon China will have to react to compete.

Marshall writes it a bit more “politically correct” and luckily on my personal blog here I can say what I want to say…..Definitely groupon has play CATCH UP in China…..there have been copy-cats out here almost since groupon opened its doors (and especially since it got popular over a year ago).

Love it or hate it, when a new product comes out in USA, other countries copy it. But they don’t only COPY it, they tailor fit it for their culture, their people’s tastes!

And how many foreigners are they going to hire? With a foreign headquarters, you will need English speaking management, and translating everything back and forth English to Chinese and Chinese to English. I bet many of those Chinese groupon sites only operate in the Chinese language, have already built their technology, and customized it for the Chinese market, and move very quickly to changes in the market, without having to wait for foreign headquarters to approve a new budget or changes in strategy.

Interesting to see the outcome from this.

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Marshall
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Mike,

You bring up a good point – the company is going to have to act “Global”, responding to local culture while maintaining a foreign headquarters as a parent company on some level. But all foreign invested companies will have to do this, and so will Chinese companies that are going to be investing in factories in the USA. I wouldn’t write them off just because of that. However I agree that in the short term Groupon must play CATCH UP and they must play quickly!

Cheers,
Marshall