Lashou.com, the mainland's equivalent of "Groupon," has set foot in Taiwan, positioning itself to go head-to-head with Chicago-based Groupon, which has already entered the market.
The company, a leading Chinese group-buying discount website, announced the launch of its Taipei site Monday, just a few days after it secured new financing worth $50 million.
"We have to take swift action to gain a foothold there (in Taiwan), as Groupon is really moving fast," Wu Bo, founder and CEO of Lashou.com, told the Global Times Monday. Groupon, which reportedly refused Google's recent acquisition offer of around $6 billion, said on December 1 it bought out three Asian deal sites, which are active in the Taiwan, Hong Kong and Singapore markets.
Taiwan-based Atlaspost, one of the three acquired sites, has more than 1.2 million local users, Groupon said in a statement posted on its website.
At the same time, the world's largest deal site announced its online launch in Hong Kong, Singapore, the Philippines and Taiwan.
"We see enormous potential in the Asian marketplace," Groupon President Rob Solomon said in the statement.
The Lashou.com chief said, "With Groupon already acquiring the No.1 (players) in Taiwan and Hong Kong markets, we had no choice but to go all out there." Lashou.com will also expand into Hong Kong and Macao before the end of January 2011, the Lashou.com CEO revealed.
While expressing little concern over Groupon's entry into the mainland market, Wu is worried about the Taiwan, Hong Kong and Macao markets since they are more influenced by Western culture. He believes that fact makes potential customers there more likely to accept Groupon's business model compared with mainland locations.
But he remains confident that his site can be successful in these markets.
"Our site can fight its way out of mainland markets that face much fiercer competition. (So) we're able to do it (again) in Taiwan, Hong Kong and Macao." There are around dozens of group-buying websites in Taiwan and Hong Kong, compared with thousands of sites on the mainland, according to Wu.
"It is hard to say which party could win over the other at the moment," said Su Huiyan, an analyst with Beijing-based research firm iResearch.
But Su said online group discount market remains weak in Taiwan, and both see opportunities there.
Currently, only 11 percent of web users purchase online via group deal websites, compared to 63.5 percent that directly purchase from online retailers, according to the report.
Lashou.com, launched in March 2010, also said Monday it raked in revenue of around 80 million yuan ($12.03 million) in November. The site expects to generate annual revenue of nearly 1 billion yuan ($15.04 million) a year, based on November's performance.
The site remains in the red due to the expansion plan, Wu said, adding the site should turn a profit no later than next June, when the site doubles its current presence in China to 200 cities.
