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Groupon's Super Bowl ad could backfire in China

An image from Groupon's controversial Tibet commercial.

TEXT OF STORY

STEVE CHIOTAKIS: The Super Bowl always features some high-profile commercials. But this one from Groupon is getting a lot of international attention.

GROUPON COMMERCIAL: The people of Tibet are in trouble. They're very culture is in jeopardy. But they still whip up an amazing fish curry. And since 200 of us bought at Groupon.com we're each getting $30 worth of Tibetan food for just $15 at Himilaian Restaurant in Chicago.

There's backlash against Groupon from human rights groups and possible repercussions all the way to China.

Marketplace China Bureau Chief Rob Schmitz is with us from Shanghai to talk about it. Hi Rob.

ROB SCHMITZ: Hey, Steve.

CHIOTAKIS: So, if Groupon has been wanting to expand to China, how is this working out for them?

SCHMITZ: Not so well. One of the first rules you learn when you do business in China is to steer clear from the three most sensitive issues among the Chinese -- they're known as "the three T's:" Taiwan, Tiananmen, and Tibet. With one 30 second ad, Groupon has managed to offend everyone involved with the Tibet issue, regardless of what side they're on. And they've certainly angered the Chinese side. The Chinese blogosphere lit up after word spread about this ad.

CHIOTAKIS: So what does this mean,Rob, for the company's future there in China?

SCHMITZ: Well, even without this enormous faux pas, reaching Chinese consumers wasn't going to be the cake-walk that it was for Groupon in the U.S. Group purchasing and group coupons aren't new to China. There are already more than a thousand Chinese companies that offer the same service as Groupon. But one thing those companies don't have is a partnership with Tencent. Tencent is the most profitable Internet company in China. More than a half a billion people use its instant messaging service. According to China's state-run press, Groupon is partnering with Tencent for Groupon's China launch. The big question is whether this Tibet ad will jeopardize that partnership. If it doesn't, Groupon still has a chance here, they just gotta mind their p's and q's -- and t's.

CHIOTAKIS: All right Marketplace's China Bureau Chief Rob Schmitz, joining us from Shanghai. Thanks, Rob.

SCHMITZ: Thanks Steve.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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