Last updated: February 18, 2011 6:01 pm

Groupon and Tencent team up for China site

Groupon has teamed up with Tencent, China’s largest internet company, to launch a group buying site in the country.

But while the US online coupon company is hiring at record speed, the website that the new staff are expected to run is in limbo, in a reminder of the difficulties other foreign internet groups have faced in China.

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At a makeshift office at the Yuecheng Center complex in Beijing, under a large Groupon logo on the wall and a sheet of paper announcing “Groupon China is hiring”, more than 50 young men and women were waiting to interview for marketing, web design and customer services jobs on Friday.

Staff at the reception identified the company’s local site as Gaopeng.com. A search showed that the domain name was registered by Ouyang Yun at Shenzhen Tencent Computer System. Mr Ouyang is deputy general manager of Tencent’s strategy development department.

But after briefly displaying a Groupon logo and other information for a few hours on Tuesday, the site went down. According to local regulators, the site does not yet possess a valid licence.

Tencent and Groupon both declined to comment. But their alliance has triggered intense fears among China’s already crowded group buying industry.

Over the past few days, rivals have been gloating over the apparent hiccough in the launch of Groupon’s China site.

“They deserve failure because they are trying, once again, to impose foreigners’ ways on the Chinese market,” said Meng Xiaolan, a web designer at a domestic online coupon company, in a microblog post.

She called Groupon “arrogant” and pointed to Yahoo, Ebay and Google as past examples of western internet companies’ failures to do well in China, which has the world’s largest internet population with 457m users.

Behind the vitriol is intense competition. According to Tuan800, an online group coupon aggregator site and the only source of regular statistics on the sector in China, more than 1,000 group buying sites have been set up. Tencent, Groupon’s partner, has been running its own site in testing mode since last year.

Executives of domestic online coupon sites have accused Groupon of “unfair” hiring practices as the US company’s job offers have lured hundreds of staff away from local companies.

Groupon staff said the company planned to hire up to 1,000 people, 70 per cent of them in marketing.

Feng Xiaohai, chief executive of Manzuo, a Chinese coupon site, has threatened to reject any jobseeker who has worked for Groupon. The name of Groupon’s China site has enraged Mr Feng even more.

Gaopeng is a part of the Chinese proverb gaopeng manzuo, which describes a table filled with cherished friends at a banquet, and the second half of which is the name of Mr Feng’s company. This could limit both companies’ options in using the phrase for marketing purposes.

As the Gaopeng.com site remains offline, analysts said it was unclear how Groupon plans to distinguish itself in this intensely competitive environment. So far, the company is improvising.

Two women were interviewing job candidates on Thursday in the lobby outside the makeshift office, with every word able to be heard by those passing.

Additional reporting by Chen Yuanni

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