Gaopeng, the Chinese joint venture between U.S. daily deals giant Groupon and China Internet titan Tencent, will merge with FTuan, another Chinese daily deals site.
Newswire Bloomberg reported Tuesday that both Groupon and Tencent issued a statement saying Gaopeng will continue to offer its own brand after the merger. Financial terms were not disclosed, but the two companies said the merger will provide consumers low-priced deals for dining and purchases and is part of Groupon’s strategy to "strengthen" its investment in China, the report said.
Groupon currently owns a minority stake in Gaopeng, which was launched in partnership with Tencent in China in February 2011, while FTuan has financial backing from Tencent, Bloomberg added. Since it was launched, Gaopeng has stumbled in the booming but competitive daily deals business which saw it shrink its operations and cut staff in various Chinese cities in August last year. Numerous other Chinese group buying sites have also bit the dust, according to earlier reports last year.
Bloomberg, citing statistics from research company iResearch, noted that China’s online group-buying market generated estimated revenue of 4.3 billion yuan (US$676 million) in 2011, more than double 2010's figure of 1.5 billion yuan.