Staff Reporters
Mar 4, 2011

INSIGHT: Backlash against Groupon ‘insensitivity’

Online discount coupon vendor Groupon’s first TVC shows a lack of cultural understanding. Campaign takes a look at what this could mean for the brand as it prepares to launch in China.

INSIGHT: Backlash against Groupon ‘insensitivity’

Groupon’s now infamous Tibet-themed Super Bowl XLV ad has the distinction of a political first — managing to upset both sides of the Tibet political divide. 

On the one hand, the pro-Tibet crowd has been angered by the ad’s apparent lampooning of the Tibet issue, with the message being that despite the country’s culture and people being in jeopardy, it is still possible to get a decent fish curry at a good discount through Groupon coupons.

On the other hand, and possibly more important, is the impact the ads will have on the Chicago-based coupon vendor’s business in China, where any pro-Tibet sentiment can quickly fire nationalist anger.

On the brink of a US$15 billion IPO and reportedly preparing to launch a portal in China with Tencent, to say the TVC has misfired would be an understatement.

Brand health diagnosis

David Wolf, CEO, Wolf Group Asia

Whether it was intentional, poor internal co-ordination, or a stupid mistake, Groupon’s first Super Bowl television commercial, ‘Oppressed Tibet’ has proven to China’s netizens that the company either does not understand China, does not like China, or thinks getting attention in the US is more important to the company’s leadership than the company’s prospective business in China. It probably did not help much with China’s internet regulators, or with Groupons’s relationship with Tencent, its China partner. 

Chinese netizens already believe foreign internet firms don’t understand China. Now Groupon carries a double burden to prove it is going to be China-savvy. 

The first step in addressing the problem would be to stop talking about China altogether. 

Next, while Groupon focuses its efforts on creating a brilliant and extremely China-smart service, the company needs to go back and review all of the mistakes other international internet companies have made in their marketing and PR in China. Armed with that insight, the company can create a small but highly-capable local PR team and develop a three-year marketing and communications programme that starts off very low-key, and stays that way until about a year after launch. 

In short, Groupon should shut up, do its homework, and make a plan before saying anything else in China or about China.

Zaheer Nooruddin, lead digital strategist, Burson-Marsteller Greater China

My take on the Groupon ad debacle is the company failed to take into account two key facts about how the social web has changed the world we live in. First, media content transcends format and borders. Second, messages that work in one market may not work as well in others. Culturally insensitive content aside, Groupon is really guilty of failing to understand these changes.

The fallout from this commercial is particularly damaging for a company that has so intently set its eyes on the immensely lucrative Chinese marketplace. With its technology and funding well in place, Groupon’s fate will lie in the strengths of its partnerships. Partnering with Tencent or another internet major in China is obviously a great move to help gain market access to the exploding social commerce sector. Groupon also needs to engage a strategic communications consultancy as a partner - not only as a firefighter in times of crisis but to help build trust among government regulators and engage Chinese consumers, both online and offline. 

Once strong partnerships are in place, perhaps Groupon’s principle goal should be to ensure that it remains on the right side of China’s internet industry regulators. The best way to do this might be to keep a low profile until it really has something to tell the world about: social shopping deals that roundly beat the socks off its competitors.

This article was originally published in the March issue of Campaign Asia-Pacific.

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