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?
MySpace global is a failure amidst a revolving door of management (see analysis) and is currently on the auction block with Tencent among the suitors. But before the dismal MySpace global failure there was the dismal MySpace China failure. As the big rumor is that Facebook has partnered with Baidu to enter China, let’s take a retrospective look.
MySpace.cn launched to fanfare in April 2007, with claims that it would be “independent,” “localized,” and hence “different” from the litany of foreign internet failures in China. Of course this was all false.
The groundswell of Chinese online game exports is growing year-by-year, providing new sources of income to Chinese companies otherwise locked in an increasingly competitive domestic market.
This article is the first in a series that will explore this phenomenon from the perspective of localization, marketing and operations issues.
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