14 DAY TRIAL // Groupon has finally made its first incursion into China, in collaboration with the local web giant Tencent. The two companies launched GaoPeng.com, a local version of the popular Groupon service. The site is pretty much a Groupon copy, apart from the name, but, apparently, there are some distinctive features.
The site is now live and serves two major cities, Beijing and Shanghai, though there are plans to expand to several more in the first phase.
Groupon has been looking to launch in China, a market with a huge potential, but it met several setbacks.
Of course, it had to partner with a local player, outside companies have to work with a local one to do business in China. Groupon chose Tencent, an internet giant which dominates the local market in several areas.
Building on top of the very popular IM service QQ, Tencent expanded to many other markets, using its huge user base and its size as leverage.
Groupon probably couldn't have found a better partner. On the other hand, Tencent could have simply went at it alone. There are already literally hundreds of Groupon clones in China.
Taobao, the auctions site linked to the Alibaba giant, is already experimenting with group buy offers for local businesses.
At the same time, the Chinese market is inherently very focused on local players and outside companies rarely do well. Google mostly failed, Yahoo pulled out and the list goes on.
So it's unclear what the Groupon brand, which is secondary anyway since the company couldn't even secure domains such as Groupon.cn which were already registered by a competitor, is going to add to the venture.
Still, clones haven't stopped Groupon elsewhere around the world and the company has managed to keep its huge momentum going while entering tens of new markets, by either setting up new sites or buying local players.