Don’t be confused. I’m not talking about Gaopeng, Groupon.com’s operation in China, but the copy cat who cannivingly registered the Groupon.cn name to piggy-back of the brand of the original company.

As suspected, the unsustainable group-buying business model with very thin profit margin of 4% in China, coupled with fierce competition has wounded Groupon.cn badly. Beijing Daily reported yesterday, that they have made a major downsizing from 4,000 to around 700 employees.

When Groupon.cn first launched in China, I really thought they were the actual Groupon.com operation of China. The logo was the same and everything else looked the same. There were even celebrities plastered on their ads, a result of their huge advertising budget of 500 million yuan. This far outstrips both the leaders, Lashou and Meituan’s advertising budget of 200 million yuan.

This dramatic structural lay-off, follows Gaopeng’s infamous downsizing of 400 staff and closing of 12 branches last month.

The blood is starting to float to the surface of the ocean. Who is next?

Jason Lim

Jason is an Australian born Chinese living in Beijing, specializing in entrepreneurship, start-ups and the investment eco-system in China, especially in the tech and social area.

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