Groupon Making 'Standard' Mistakes in China

Groupon China

One clear rule has emerged for retailers in the last few years: If you want to succeed globally, you have to know how to expand in China.

At the Global Mobile Internet Conference in Beijing, a panel called “How Foreign Companies Can Succeed in China” name-checked Groupon…and highlighted the mistakes the online discount giant is already making.

Besides those off-putting Super Bowl ads (which, yes, did come up during the panel) Groupon is on track to make broader-reaching, and more typical, Western mistakes during their foray into the Chinese market.  If things don’t work out, they won’t be the first; foreign Internet companies have a tendency to do poorly in China.  Google had to partially withdraw its business from the country, and the conference panel mentioned that eBay, Yahoo, and MSN have all done poorly there.

When it came to Groupon China, first and foremost the panel claimed that the daily discount beast has too many execs who don’t speak Chinese running their China operation.  They also mentioned that that Super Bowl ad came out the same week Groupon officially launched in China, and it angered Chinese nationalists about as much as it ticked off the Free Tibet crowd.  Plus, the Chinese sales director then left the company, making his departure known over Weibo (a Chinese version of Twitter).  The new head of sales is apparently a foreigner, and while the company has partnered with Chinese company Tencent, the panel found it notably backward that Tencent would be running the technology side while Groupon, with foreign managers at its core, would be handling the sales end of the business.

While it seems unlikely that failure in China would bring Groupon down (we’re not sure what would! Perhaps Facebook Deals?), it might help copycats like LivingSocial to close the gap between themselves and the market leader.