Big Trouble in Groupon China

It's no secret that Gaopeng, Groupon's China outlet, has had its share of bumps in the road. Well, TechNode is reporting that Gaopeng, which partnered with China Internet company Tencent last year, is rumored to be merging with FTuan, a competing Chinese daily deal service. This could happen as early as late May -- assuming the rumors are true. Regardless of whether the rumors are true, the reason for these rumors -- Groupon's continued loss of value -- are a certifiable fact. TechNode also says, more specifically, this is why Gaopeng is suffering:

Gaopeng’s pitfall in China could be boiled down to: a) blind expansion even before getting to understand local market; b) hire too many expat executives who have little knowledge of local market or couldn’t even directly communicate with local staff because of language barrier; and c) failure to acknowledge different market conditions in implementing successful experience. 

Groupon's stock continues to nosedive closer and closer to single digits, meanwhile: At press time, the stock is at $11.76.

But it's also this very fact that is making folks consider investing in the company now. Obviously its old methods haven't been working, and Groupon knows that. The company, hopefully, is in roll-up-our-sleeves-and-bust-out-the-elbow-grease mode. Expect some changes, and drastic ones, in the near future. Wall Street Journal's Market Watch has a long, long, long dissection on reasons to like the stock.

Also, for what it's worth, MSNBC's Motley Fool, has an editorial on the process of trying to get a refund from the site. It isn't too pretty, even if the author is cautiously optimistic about getting an automated response back:

It can't be a good sign if its customer service staff is so swamped that it's falling behind here. Are refund requests like mine pouring in? Is the company in the process of revamping its policies to the point where there's a bottleneck this week? Are folks generally more unhappy with Groupon this week than its staffing requirements planned for? One can always argue that my case requires some more research on Groupon's part, but that would seem to go against the automated nature of the email response.

Then again, an automated response is better than no response at all, right?

David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a columnist for EGM. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.

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