I was chatting with someone earlier and he was interviewed with Gaopeng for a job. He said “it is totally insane.”

Just like many Western internet companies, Groupon is using a foreigner to head its China division – a recipe for disaster. “If they want to hire a foreigner, at least they should hire someone who has been living in China for a while,” said the person, “These people have no clue of what is going on.”

Gaopeng, Tencent and Groupon’s China group buying joint venture, is headed by two persons from Groupon’s German office. He was interviewed by the younger guy (about twenty something). The guy said they plan to hire a total of 2,000 people. And just on that day, he was going to hire 100 to support 4 cities. “They have not done e-commerce before. They seems to be from some management consulting firms. They don’t even have an organisation chat for Gaopeng,” said the person

The offer is even more bizarre – a very low salary for the first three months and then they will decide. “You must take a leap of faith,” said the Gaopeng guy. This might works on a young man with just 2-3 years of experience, but the person I talked to is a senior executives with over 10 years of working experience.

“It’s a total chaos. The operation will run into problem very soon. Tencent is not satisfied with them already,” said the person.

I think the Western internet companies just never learn. Starting from eBay in 2003, to Google in 2005, and now Groupon, they totally underestimate the complexity of China Internet market. This is not a virgin land where they can just send a few low-ranking executives and a half-baked business plan, and hope to dominate the market very soon.

Group buying is already an intensively competitive sectors in China, with many local competitors, and the largest ones are rich with VC money. Groupon’s partner, Tencent, is also not someone you can mess up with. It is the world’s third largest internet company. And, it has a reputation of being tough, even with its own partners.

I think, Groupon will soon join its peers as one more Western internet companies failed in China. Thinking about it, that is not too bad. At least it is among some of best-known names in the world, such as Yahoo, Google, eBay, etc.

Author of Red Wired: China's Internet Revolution, the first book to completely survey the nature of China's internet. (http://redwiredrevolution.com/) She previously was the lead China technology reporter...

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1 Comment

  1. Interesting situation. Something which may be happening as well with their Japan expansion plans. Maybe they should have taken Google’s offer after all !!

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