Groupon Showing Slow but Steady Gains in China

Groupon launched in China earlier this year and while it’s been tough going, the Chicago native is slowly gaining ground.

The competition in China’s group buying industry is fierce. According to Tuan 800.com, a group-buying aggregator, China currently has 4500 group buying sites but Groupon, or GaoPeng as it is called in China, was is not listed as one of that country’s top ten. It actually came in at number 15 in terms of revenue at the end of May, which considering the number of other group buying sites in the race, Groupon’s rather late start in China and the fact that GaePeng has only been open for business for just a few months, the site’s current position looks almost impressive.

In an article by Michael Kan on PCWorld:

“Some of it just gets down to marketing and exposure,” said Mark Natkin, managing director of Marbridge Consulting in Beijing. “An amount of time is needed for early users to have a chance to use the product and tell their friends about it.” GaoPeng has been offering discounts for only the past three months.

Tuan.800.com also reported GaoPeng’s revenues in May at about $693,000, up from $200,000 in April. While these may not be the figures we’re used to seeing from Groupon in the U.S. and other parts of the world, it does show that the site is making impressive gains in a very tough market.

Groupon’s Chinese site is, however, positioned to grow, analysts said.

The site is already doing better than when it first came into the market, Natkin said. “From the outset, they were still finding their feet and they were a little heavy on having so many foreign managers,” he said. But now GaoPeng appears to have cut down on the number of foreign executives, in an effort to bring in more local managers who understand the Chinese market.

Su Huiyan, an analyst with China-based iResearch, said GaoPeng’s position in the market is gaining. “We see that user visits to their site are steadily going up,” she said.

Source:PC World