Customers can now sign up on Gaopeng.com, with daily discounts from local merchants to debut in March, Groupon and Tencent said in a joint statement.
“The collaboration combines Groupon’s global group-buying experience with Tencent’s in-depth knowledge of Chinese online communities,” the companies said.
“We are excited to be in China collaborating with a leading Internet company and highly-respected business leaders,” Andrew Mason, founder and chief executive of Groupon, said in the statement.
Gaopeng.com is funded by Groupon, Tencent Collaboration Fund — established earlier this year — and private equity fund Yunfeng Capital, whose investors include Alibaba Group founder Jack Ma.
China has the world’s biggest Internet population with at least 457 million users.
Despite the potential for rapid growth, Groupon is likely to encounter tough competition as many Chinese firms, including Tencent, have already started online group-buying sites.
The website http://www.groupon.cn is operated by a rival company, forcing Groupon to use the gaopeng.com address. Gaopeng roughly translates to “cherished friend”.
Founded in 2008, Chicago-based Groupon offers discounts to its members on retail goods and services, offering one localised deal a day.
The company announced in January it had raised $950 million in a month to invest in technology, fund its global expansion and compensate company employees and early investors.
The company said then its subscriber base had grown to 50 million from just two million at the beginning of 2010.
Earlier this month, Groupon decided to pull a series of advertisements debuted during the Super Bowl that critics said made light of the plight of Tibet, whales and the Amazon rainforest.