The Chicago-based company began its operations in China in March under the name of Gaopeng.com, joining other competitors in a market that grew to $70 billion last year, the Los Angeles Times reported.
The market is expected to grow up to 80 percent this year as more Chinese use the Web to buy and sell goods, the Times said, quoting the China Market Research Group.
"It's really taken off like it has in the U.S.," said Bill Bishop, an independent Internet analyst in Beijing. "Consumers love it. Who doesn't love a deal?"
In this market, companies generally form partnerships with local businesses to offer products and services at deep discounts, marketing the deals through e-mails sent to subscribers daily, the Times said.
Some sites require a minimum number of responses from likely buyers before completing a deal. Buyers typically have 24 hours to purchase the deals, which can be downloaded and printed as coupons that merchants will honor for weeks or months.
China has 450 million Internet users who shop for bargains on everything from doctor visits to bridal photos.
Groupon officials did not comment on their China operation but analysts told the Times the company must find a way to get buyer attention to establish brand loyalty.
"The consumer [in China)] doesn't really care who is who," said Edward Yu, chief executive of Beijing-based Analysys International. "As long as the browsing experience is good, the price is good, they don't care who is providing the service."
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