The great consolidation is coming, but it hasn’t arrived yet. Instead, we’re being treated to an adaptation of Waiting for Godot, with absurd valuations and IPO jokes, while everyone waits around for something, anything that will bail them out.
On December 1st, Gaopeng—a joint venture between Groupon and Tencent—finally made a formal apology for the ‘fake Tissot incident’, over a month after their initial denial. They offered a full refund to everybody that bought a fake Tissot watch from Groupon China as well as give an additional 200 yuan in credit. They could have fixed this problem over a month ago, but instead chose to deny it first, only to be pushed to finally accept it in the end. What took them so long? Let’s take a quick look at Gaopeng’s recent Tissot problem.
In addition to reflecting poorly upon Gaopeng, the incident has further shaken trust in China’s embattled group-buying market.
It’s an open secret that Groupon’s China JV, Gaopeng (高朋), is on its way to becoming the next failure of foreign internet companies entering China.
Rumors, supported by employee weibos, say the company is laying off as much as 30% of its work force in what should be the most commercially lucrative city in China: Shanghai. Looking at the number of purchases on Gaopeng’s daily deals, it’s not rocket science to conclude that business is bad.
Why is Groupon failing in China when its business model and expansion strategy worked well in other countries?
BengXin.com 蹦心网 is a curious case, it cannot be strictly defined as any specific type of social networking site. In fact it is a combination of Facebook, Foursquare, Groupon. So what exactly is BengXin.com?
Let’s be clear on one thing, China doesn’t kill foreign companies, foreign companies commit suicide in China (Dr. Kevorkian not required). When tech companies enter China, pundits often point to Google, eBay, PayPal, Yahoo and Facebook as examples of failures. They neglect the foreign successes such as Starbucks, KFC, Wal-Mart, Apple, Nike… Okay, you got me, none of these are tech companies but is Groupon’s core business that different from a traditional brand/retailer?
