China’s Most Audacious Groupon Clone on the Brink, 80% of Staff Fired

The group buy website that most audaciously cloned Groupon in China looks like it might be one of the first big-name casualties in the ferocious daily deals market. Formerly known as, provocatively, Groupon.cn – but now called TuanBao, with only the URL saying “Groupon” – it enacted a new round of job cuts this week that saw dozens of people being let go from individual sales offices scattered across the country.

It now appears that the cloned Groupon.cn… hmmm, I mean TuanBao, has fired 70 to 75 percent of all its staff from the time of its inception to now. Earlier this year, Chinese media reports today, the company had 4,000 employees nationwide. But that figure is now at 700. That’s 82.5 percent of all employees at TuanBao having being told to clear their desks.

Taking some regional offices as examples, TuanBao’s Beijing branch has trimmed its editorial department from 120 to 36 people. Further south, in Suzhou, the original team of 40 there is now down to 10.

TuanBao/Groupon.cn's rather confusing dual identity.

TuanBao’s woes are indicative of the group buy sector’s extraordinarily tight margins, and the fact that throwing lots of poorly-paid and desperate sales staff at the situation doesn’t necessarily turn all your offered deals into sold deals. Industry insiders believe that there are as many as 5,000 group buy sites in China – and none of them are actually making any money.

The official and genuine Groupon operations in China, Gaopeng, has had a rough summer as well, with as many as 400 staff being fired as part of an apparent tightening or restructuring. Though the official response was that the company was just firing underperforming workers.

In April of this year, a false rumor spread through the deals industry here that the real Groupon had acquired the Groupon clone in China. But this news surely puts that notion to rest forever. Now the real Groupon needs to be much, much more worried about its more successful adversaries here, such as Meituan or Lashou. Indeed, the latter might even beat Groupon.com to a US IPO, which would be pretty interesting.

[Source: DoNews – article in Chinese]