Instead of going for a run during my lunch break yesterday I decided to write an article about Groupon China. It was published on the Silicon Alley Insider last night, the original article is here. Make sure to also read the comments under the SAI article, and the update I just added at the end of this blog post.
It doesn’t happen often that a US Internet company enters the Chinese market with a huge budget, so when a company does this the Chinese media follow all the steps this company makes.
The media know that most non-Chinese Internet companies eventually fail spectacularly, so a good story is almost guaranteed. Groupon seems to be doing its best to become part of the infamous group of companies like EBay, Google and Yahoo.
In January stories surfaced saying that Groupon wanted to enter China by investing hundreds of millions of dollars, which is a good way of attracting press. Then rumors about a potential joint-venture with Tencent (one of China’s biggest Internet companies) were reported, and these turned out to be true. Many people including myself thought this would be a smart strategy to enter the market and gave them the benefit of the doubt. But things have changed a lot since.
First came the news that Groupon China’s