A Window into the Demise and Bizarre Rebirth of TuanBao

Empty office after TuanBao closed numerous branches and laid off staff

Chinese magazine The Founder (创业家) ran an interesting in-depth feature today on TuanBao, also known as Groupon.cn, the group buy company that grabbed up the Groupon domain, forcing the real Groupon to call its China service Gaopeng. The article focuses on founder and CEO Ren Chunlei (you may remember him from those rumors that the company had gone bankrupt and he had fled), who apparently has managed to pull the company out of its death-spin. Sort of.

Apparently, Ren has managed to slow the downward spiral by doubling down on Tuanbao. He’s put his life savings into the company, mortgaged his house, and has apparently found a new investor who’s willing to back TuanBao, although the deal isn’t finalized yet. And the company is working to pay back retail partners it owes, albeit gradually as its debts are significant.

Laid-off employees take photos to commemorate their time at TuanBao

It hasn’t always been easy to keep the faith, either. In the article, Ren talks directly about employees who betrayed him, though he doesn’t name names, and says that the rumors that he had fled came from a TuanBao employee. But like most group buy sites, TuanBao’s biggest problems were all about money:

Click for an interactive version of this chart

In a move to combat the problem you can see in the above chart — that sales are growing, but too slowly to combat the massive net losses — TuanBao has set off in a bold new direction: everything on the site is now free. The idea is that this cuts way, way down on the company’s overhead while hopefully putting it in a position to become the group buy site with the most completed deals. It’s about sharing, Ren says, with TuanBao being a bridge between merchants and customers. “We want to be the Taobao of the group buy industry,” Ren said.

But how will they make any money? Who knows. No one but Ren, and he isn’t saying. He says he has a plan; time will tell whether or not it’s any good. And we may not have to wait long. With the company low on cash, Ren will have to make his move soon if TuanBao is to survive.

[The Founder via Sina Tech, the full story is worth checking out if you can read Chinese]