Lashou's Groupon+Foursquare business model gains recognition.(Beijing Lashou Network Technology Company)

May. 12, 2011 (China Knowledge) - Beijing Lashou Network Technology Co, which operates one of China's most popular daily coupon websites, Lashou.com, has raised US$110 million to expand its business and further compete with international rivals such as U.S.-based Groupon Inc. Growth capital firm Milestone Capital led the investment, and other investors included GSR Ventures, Norwest Venture Partners, Taishan Invest AG, and Tenaya Capital, as well as funds affiliated with Swiss luxury goods company Compagnie Financiere Richemont SA. Four months ago, Dow Jones VentureWire reported that Lashou had raised US$50 million at a valuation of around US$500 million. The growth of the group-purchasing sector in China is very fast. Besides overseas competitors like Groupon, Lashou's rivals also include venture-backed local competitors such as Beijing-based Meituan, which is backed by Sequoia Capital, and Manzuo.com, backed by Kleiner Perkins Caufield & Byers. Lashou.com's business model, called Groupon+Foursquare model or simply G+F, is not just a group-buying platform. The model combines daily group-purchasing deals with location based check-in services. The combined business model brings several advantages. It helps increase the competitive barrier to entry, enhance the attractiveness towards vendors from group-buy one time Internet promotion to daily mobile client promotions, and improve user stickiness and generate more users. Wu Bo, Lashou CEO, said the company's G+F business model is different from those of other business websites, and the firm will continue to explore innovation in the sector. Currently, investors show a lot of interest in the company, which means that Lashou has gained recognition from them. Lashou is actively improving its operations and testing marketing strategies including targeted specialty programs such as "Many Groups Per Day", "Lunch Killer Deals by the Seconds" and "Hotel Channels." The company is also expected to launch Lashou Experience Shops this year. China's group-buying market is expected to report strong increase in 2011 as more Chinese people look for bargains especially with rising inflation, according to the China Electronic Commerce Research Center. The market size is estimated to almost triple to RMB 24 billion, or US$3.64 billion, from RMB 8.86 billion in 2010, according to an earlier report from China Knowledge.