Zheng Bin, an employee with Lashou's marketing department said two current DailyDeal investors have participated in the Lashou deal, but declined to disclose further details or financial terms.
Lashou, which literally translates as "hand-in-hand," was launched on March 18, and received its first round financing of an undisclosed amount from Taishan Angel Fund (TAF) on April 22.
Similar to the American Web site Groupon, Lashou follows the Web-based business model deal-a-day to offer a single group purchase or "Groupon" discount coupon for 24 hours. If a predetermined minimum of people sign up for the offer, then the deal becomes available to everyone, but if the minimum is not met, the coupon is canceled for that day.
Wu Bo, Lashou's president and chief executive officer (CEO), told Web portal Sohu,com that Lashou's business model, which incorporates a "collective action" concept with social networking elements, is attractive to investors.
The site partners with a variety of retailers, venues and service providers like restaurants, bars, movie theaters and beauty salons, and generates profit through revenue sharing agreements with partnering establishments. Lashou's also incorporates location-based social networking functions, which allow users to connect with friends and comment on venues.
There are currently 300,000 registered Lashou users in seven cities, including Beijing, Guangzhou and Shenzhen. The site plans to launch localized services in 50 cities and expects its user base to grow to 1 million by the end of 2010.
Berlin-based DailyDeal.de is a start-up which also follows the Groupon business model, backed by a number of seed investors, including Dr. Stefan Glänzer, an early investor in music portal Last.fm, and Michael Brehm, the former CEO of SNS sites StudiVZ.de and Jochen Maaß.
The rapidly spreading popularity of group discount sites in China is giving physical small and medium sized enterprises (SME) across the country a way to market themselves online. The unique business model may prove a serious new competitor in China’s lucrative online shopping sector.
