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According to reports in Chinese media, the Groupon/Tencent JV will be on a 50/50 basis.... Groupon usually expands into markets outside the U.S. by acquiring the largest collective buying websites in the local markets and renaming them under the brand name of Groupon. With this model, Groupon has entered the markets of Hong Kong, Taiwan, and Singapore. The cooperation with Tencent shows that the company will enter the Chinese mainland market in a new way.

This new JV company will make the competition in the Chinese group buying market more intense. Currently, the more popular sites are: MeiTuan, LaShou, Twangoo, FunShare.. just wonder what we see from these companies to couter this new threat.

It is interesting to see some of the original group buying sites move away from the 'daily offer' to becoming more aggregators of many of the group buying sites... trying to avoid the grind of attracting venues to get the best deal. This two will become untenable in the near term as dominate group buying sites take steps to move into this area as well.

According to the statistics of the Chinese Internet collective buying industry, by the end of 2010, there were 2,612 collective buying websites in China. I just wonder by the end of 2011 when a lot of these companies run out of VC funds or energy in fighting a loosing war.

UPDATED:  Google announced today (24/1/11) that it is gearing up to launch Google Offers, a daily deals website set to compete with social commerce market leader Groupon.

For those that want more information on group buying in China may find this presentation of interest.