“It’s an open secret that Groupon’s China JV, Gaopeng (高朋), is on its way to becoming the next failure of foreign internet companies entering China,” the Chinese tech blog TechRice wrote earlier this month. In the U.S., Groupon, which is being sued by its employees for ludicrously-uncomfortable working conditions, and has been the subject of a string of bad press for everything from its shaky financials to the peppy memo that was accidentally-on-purpose leaked to AllThingsD, prompting an SEC investigation that was resolved without penalty. But after canceling its IPO roadshow, Dealbook is reporting that the startup is back on track for a public offering even as the markets continues to suck.
According to Dealbook’s sources, Groupon is shooting for an IPO in late October or early November, which would mean that Groupon could restart its rounds of investor pitches (the “IPO roadshow”) by the middle of October.
But Gaopeng, a joint venture between Chicago-based Groupon and Chinese internet company Tencent, is flailing. The company is reportedly laying off thirty percent of its staff, TechRice says, and purchases through the site are not encouraging.
From a Gaopeng employee’s post on Weibo, a Twitter-esque site:
Colleague called told me [he/she] has been fired, for the last couple days it’s chaos at work, people were crying all over the place! Right now there are reporters outside of office, but we can’t go out, not when there are guards at the door. There weren’t any signs of the lay-off, the HR came requesting the re-formatting of work computers, to sign an agreement and leave the premises within the hour! No negotiation were offered, in our department [alone] over 20 people were layed-off. Not sure [if this happens to me] how I will cope with it.
Meanwhile, Tencent seems to have lost the faith–the company purchased a stake in a competing group-buying site.
Besides fierce competition, Gaopeng’s troubles mirror Groupon’s: too-fast expansion and a string of bad publicity. Ready the schadenfreude.