Rumor: Groupon Eyes Chinese E-commerce Market

Mads Faurholt-Jorgensen, vice president of Groupon, has reportedly revealed the company’s intention to enter the Chinese market.

According to information from an insider quoted by local Chinese media, Mads Faurholt-Jorgensen said in a recruitment email that Groupon is seeking new talents and it plans to increase the number of its Chinese employees to 1,000 over three months. The email was reportedly sent to students of Harvard Business School, stating that Groupon offers internship opportunities in Japan and China, and it hopes to invite people to its team in Asia.

Mads Faurholt-Jorgensen also said that the Asian market is important for Groupon, especially the Chinese market, because the company plans to enter this marketplace.

Prior to this, Groupon reportedly met several Chinese group discount shopping websites, including Lashou.com, Ftuan.com, and Meituan.com, in Shanghai, aiming to enter the Chinese market by cooperating with these websites. However, no agreement was apparently reached during the negotiation.

China may be Groupon’s online coupon downfall. While there are dozens of these upstart local copycat businesses, building a sustainable large business in China may be tricky. While the company may have success in authorizing and guaranteeing discounts from large manufacturers, securing deals for Groupon’s users from the local Chinese dining, travel, and retail operations may be problematic.

Groupon is a deal-of-the-day website that is localized to major geographic markets in the United States, Canada, Brazil, Germany, France, the United Kingdom, Italy, Portugal, Spain, Japan and Poland. Launched in November 2008, the first market for Groupon was Chicago, followed soon thereafter by Boston, New York City, and Toronto. As of October 2010, Groupon serves more than 150 markets in North America and 100 markets in Europe, Asia and South America and has amassed 35 million registered users.