Groupon’s Chinese arm hit by fakes row

Groupon Groupon has admitted it inadvertently sold fake Tissot watches through its Chinese joint venture. Photograph: Justin Lane/EPA

Groupon’s bid to expand into the Chinese market has hit a hitch after it discovering it had linked up with a company selling counterfeit luxury watches.

The daily deals giant has pledged to refund all customers who bought the Tissot watches after discovering they were fake.

Hundreds of people had bought the watches through the Groupon deal, which offered buyers a watch for just 690 yuan (£67), a quarter of their normal retail price.

Groupon’s joint-venture Chinese operation, Gaopeng.com, said that after an investigation it discovered the merchant “had given us fake agent qualification documents”, according to Reuters.

“We are outraged and we have begun legal proceedings. We hope to protect the interests of consumers and Gaopeng through legal methods,” the company said.

The incident highlights the legal challenges Groupon faces in China, which is notorious for counterfeit goods.

Groupon, which last week made a successful initial public offering valuing the company at more than $11.4bn (£7bn), is struggling to crack China where local daily deals operators dominate.

Lashou, the country’s leading daily deals website, filed in October for an initial public offering on Nasdaq and is planning to raise up to $100m to expand its marketing and delivery systems.

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