Rumor: Groupon in China to be Acquired by FTuan, Sold Out by Its Joint-Venture Partner

Groupon’s (NASDAQ:GRPN) daily deals site for China, Gaopeng, which is run as a joint-venture with Tencent (HKG:0700), looks like it is a pawn in the upcoming restructuring of Tencent’s group buy operations. New rumors say an internal email from Gaopeng has told staffers that Tencent’s deals site, QQTuan, will stop being an aggregator and instead feature only offerings from Gaopeng and its outsourcing partner FTuan. Further to that, a Gaopeng executive is believed to have said that the Groupon subsidiary will be acquired by FTuan, with an assist from Tencent selling its stake in the joint-venture.

Clearly, there’s a possible contradiction in those whisperings floating around the Chinese e-commerce industry – if Gaopeng is made extinct by Tencent divesting itself of its share and then it’s acquired by FTuan, then the first rumor doesn’t make sense. But Gaopeng might continue to operate under FTuan ownership.

Note that Gaopeng is a very minor player in China’s deals industry. When we looked at market share stats for January, we saw that Groupon’s venture had slipped to 14th position, losing half of its already small market share since last August (from 4.2 to 2.1 percent). Tencent’s outsourcing partner, FTuan, which runs all the deals on the QQTuan site, was in 7th place.

Marbridge Daily summarized the situation by writing:

An industry source told Sohu IT that Tencent will trade its stake in Gaopeng to FTuan in exchange for a share in FTuan of equivalent value, based on Gaopeng’s current valuation. Tencent and Gaopeng have also reached an agreement under which Gaopeng will become an investor, and will be replaced by FTuan in the control and operation of the company.

These stories have been rumbling on for weeks, but if it’s true that Gaopeng staff have been informed orally by executives that an acquisition is imminent, then we might finally see an official conclusion to this – and see if Groupon/Gaopeng as a brand will even survive in China.

On a related note, Gaopeng’s CEO, Yang Chengjian, submitted his resignation to the board last week, citing personal reasons. The leadership role is passed to Gao Xia.

[Sources: Marbridge Daily 1 and 2]