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(Image credit: Getty Images via @daylife)
Groupon is working on a deal to combine Gaopeng, its daily deals venture in China, with FTuan, another daily deals service backed by Tencent, a Chinese Internet giant. After the merger, both services will continue to operate under their current separate brands. []
Ftuan and Gaopeng are ranked 9th and 10th, respectively, in the hyper-competitive Chinese daily deals space which has seen a lot of players enter the market, trying to cash in on the latest craze. By combining their operations, both players will benefit from cost savings in product sourcing, logistics and operations.
Check out our complete analysis of Groupon
Groupon is the largest player in the U.S. but has hardly seen much traction in other international markets, including China. With the local expertise provided by Tencent and operational synergies following the merger, the combined entity could become one of the top players in coming years.
International deals account for a majority of its overall value, and are expected to drive a significant portion of its revenue growth in coming years. China, which is a huge market, could play a major role in Groupon?s future.
The company leads the daily deals space in the U.S., where it competes with LivingSocial backed by Amazon, Google Offers, Yelp and countless clones, but is looking to expand its offerings in other categories to diversify revenues.
We currently have a $14 Trefis price estimate for Groupon, which stands nearly 40% above its current market price.
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