Internet Death Knell As Group Discount Buying Websites Merge In China
Ftuan.com, a Chinese group buying website, and Gaopeng.com, the joint venture between Tencent and Groupon, have reportedly completed their merger and integration, and the new company will be led by Lin Ning from Ftuan.com.
According to reports in Chinese local media, Tencent owns a 30% stake in the new company while Groupon owns 20%. Ftuan.com refused to reveal its share amount. Other investors include Lenovo and Yunfeng Capital.
After the integration, Ftuan.com and Gaopeng.com will still be operated as two independent brands; however, the two companies will have a unified sales team. Gaopeng.com will mainly be responsible for exploring the high-end market, while Ftuan.com will focus on the white-collar user group.
Rumors about the combination of the two group buying websites started in April 2012. At the end of April, several executives of Gaopeng.com, including CEO Yang Chengjian and COO Ouyang Yun, departed the company. It also implemented large layoffs and about 70% employees were cut during the past few months.
According to statistics provided by Tuan800.com, a Chinese group buying navigation website, in April 2012, Ftuan.com’s sales were only about CNY120 million, ranking sixth among Chinese group buying websites; while Gaopeng.com’s sales were merely CNY23 million, ranking tenth.
Prior to this, Ganji.com, a Chinese lifestyle information website, announced plans to give up its group buying business in April, and Lashou.com, another Chinese group buying website, cancelled its IPO plan in America. There are still dozens of competitors in this space in China, and worries that retailers are no longer interested in promotions via these types of platforms.