Is Tencent The Wrong Partner For Groupon In China?

  • Posted by
  • on August 8th, 2011

Groupon may have chosen the wrong partner for China.

Its struggling Gaopeng joint venture with Tencent looked great on paper, but I was always a bit confused as to why Tencent would focus its resources on the Groupon partnership, rather than on its wholly owned QQTuan group buying service.

An article in the Chinese press today may explain things. If this article is correct, Tencent never intended for Gaopeng to succeed, but instead is using the deal to block Groupon from becoming a real competitor, while building out its own services.

Could Groupon have been so naive about China that they entered into a JV without requiring a non-compete commitment from Tencent?

And where is DST in all of this? It appears the wheels are coming of Gaopeng, and one would think they might want to prevent a total meltdown of this JV.

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