Dianping Enters China Tuangou

Joining the latest China Groupon craze is Dianping, Dianping is pretty much similar to ZAGAT which has started earlier and has worked closely with restaurants. This gives Dianping an advantage of having already a strong network, not considering they have large diners database, solid reviews, editorial team for support and restaurant advertisers.

I do believe Dianping Tuangou or Groupon will be a very strong competitor in the market, especially since they already have an existing restaurants, bars and spa listing to work with. But of course they have to worried on positioning against two thousands of their similar peers clone in China alone. Not mentioning Groupon has just hit strike four in China.

Here's why I think they will rise up fast:

Dianping started their restaurants directory listing and reviews since April 2003, almost 8 years in business and strong user base.
Since their opening, they've expanded into bars, spa and entertainment venues listing.
Their listing covers over 2,000 cities in China, with over 1 million listings.
They do not need to re-approach the restaurant, not mentioning they don't need to explain what is Groupon as everyone has done it probably, so it works in their favor as the market is ready and embracing Groupon.
Adding on top of that is Dianping has promoted its brand strongly in the China dining industry arena.
Other China Groupon clones when launching restaurants deal will pull review mostly from Dianping, while Dianping already has them and can pull "celebrity" rated reviews (by celebrity means people that uses Dianping heavily and gets a lot of credit or flower which raises their profile as top diners in the city, their review means the world for other users and becomes a guide).
If you look closely to details of the deals, you'll see on the right hand side, Dianping can easily launch a deal with a chain restaurant, pull up all the listing of the location and also reviews, giving users flexibility on finding not only one restaurant to go to, but also multiple if it is a chain, thus guaranteeing that people can actually use the deal.
Finally, again the strong database they have for years Dianping has been promoting their membership cards, they even work in promotion with Banks in China.

I do question or more likely to caution restaurateur in China to ensure they have a strategy set for utilizing these type of Groupon, remember that discount means you are eroding your profit margin and also hurts your positioning. The only way to compensate is to ensure you have a longevity on your marketing goal, that is to capture database or get more positive reviews.

I've worked with one Groupon deals previously, does not mean when you give discounted you get half the service, you have to shine as customer has to be satisfied and also don't get addicted, I met restaurateur or F&B people that gets addicted and believes these are the diners source. Which is not, as you know the price around Groupon in China is around RMB50-200 average if you are operating an upscale establishment, this is not the platform for you.