Lashou Group, China’s leading group buying website, hopes to raise US$100 million in an initial public offering on the Nasdaq exchange to expand its marketing and delivery systems, Reuters reported. Launched in March 2010, Lashou has operations in 500 cities or towns in China, and has a business model similar to Groupon, where consumers buy discounted deals from merchants who have revenue-sharing agreements with Lashou. “E-commerce in China is hyper competitive, much more than the US, and if any sector stands out as highest risk for lowest return, then it is group buying,” said Michael Clendenin, managing director at RedTech Advisors. Groupon is also preparing an IPO, despite having recently laid off staff at Gaopeng, its joint venture in China with Tencent. Refering to Lashou, Clendenin said, “The company is just barely two years old, burning cash on high marketing expenses and has some very strong long-term competitors in Taobao, Tencent and Renren.” Lashou reported a loss of US$60.57 million with sales and marketing expenditure soaring 708.4% in the first six months of 2011.
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