Groupon knocks on China’s door with dirty tricks, Chinese group-buying site says

February 21, 2011Jing Gao3 Comments, , , , , , , , , , , , ,

From China Business News

As Groupon strides eastward to break new ground in China, its rivals in the country bristle at its domineering vibes and aggressive strategies, including some they accuse of being unfair and shady.

On one morning in January, 2011, Manzuo.com (满座网, literally, full house, capacity audience), a popular Chinese group-buying site, received a phone call from an allegedly newly founded gift company. The person on the other end of the line said they want everyone in Manzuo.com to try its chocolate, and that free chocolate can only be redeemed by an electronic coupon sent via text message. Therefore, the gift company needs to get the Manzuo’s employee addresses.

The receptionist at the front desk was very happy that she could be of help. A few minutes later, the gift company easily got contact information of all the employees of this group-buying site that ranks among top five in China in terms of turnover. Afterwards, Wang Ke, Manzuo’s COO, dialed back, and was flabbergasted by the revelation: far from a gift company, the phone call reaches the China office of Manpower, the internationally known employment agency.

“Everyone knows, Manpower is hired by Groupon as its headhunter,” Wang Ke said. He felt that the whole hoopla about Groupon entering Chinese market suddenly looms large.

groupon-china-logotencent-qq

Yes, Groupon is coming. And it has paired up with Tencent, a tech giant that daunts most Chinese start-ups with its diverse services, including social networks, Web portals, instant messaging, and online gaming. On February 1, the domain name Gaopeng.com was registered and owned by Tencent’s Ouyang Yun (欧阳云), who now serves as the CEO of the cooperative as a result of Tencent and Groupon’s partnership. (Jing: Interestingly, even the Chinese name of Groupon, Gaopeng (高朋, literally eminent guests), is meant to lead Manzuo by the nose, as Gaopeng and Manzuo form a classic Chinese saying, “Eminent guests make a full house.”)

Less than a month ago, 20 Chinese group buying sites formed an alliance and vowed not to hire anyone who worked for Groupon in a bid to thwart the company’s plan to poach their workers. In their joint statement, the 20 companies said, “Groupon enters China by hiring in a manner similar to a pyramid scheme, and even goes so far as to violate the industrial codes for competition and employs dozens of headhunters to rummage for employees. This crazy act, which harms the collective interest of the entire industry, should be counterattacked by China’s group-buying businesses in a concerted manner.”

Zheng Bin, director of marketing of Lashou.com (拉手网, literally hand-in-hand), was quoted by NetEase on January 25 as saying, multiple mid-level managers of the company had been contacted by Groupon’s headhunters with a golden hello of 20 percent pay raise. In response, Lashou had to retain its employees by increasing their salary.

Related articles:

3 comments to “Groupon knocks on China’s door with dirty tricks, Chinese group-buying site says”

  1. Anonymous | February 21, 2011 | Permalink Reply

    Gaopeng/Groupon is already advertising on public screens around Beijing

  2. Jianghua73 | February 22, 2011 | Permalink Reply

    Sounds to me Groupon is perfectly equipped to operate in China. They are receiving good, pragmatic advice if they have already realized that "whatever it takes" is the only profit making model in China.

  3. Makvespera | March 5, 2011 | Permalink Reply

    I am a Hong Konger and I usually visit Twangoo.com instead of groupon. Do you know whether your accusation applies to groupon Hong Kong?

Leave a Reply