That’s right. Lay aside everything you’ve heard so far about Groupon’s ambitious plans to hire 1,000 China employees by March and its insistence that it will beat the many Chinese clones that are already up and running here. Hot air or not, Groupon China is effectively history in the People’s Republic.
Why? Earlier this morning, Groupon spent $3 million to blow up its China business to smithereens with a 30 second ad screened at the Super Bowl XLV. The ad was the social-buying giant’s debut at the event and was seen by an estimated 100 million people.
In the ad (see video after jump), actor Timothy Hutton is seen in a Chicago-area Himalayan restaurant. As a waiter in ethnic Tibetan garb serves up his food, Hutton says, “The people of Tibet are in trouble, their very culture in jeopardy.” And then, in a light-hearted tone, he adds, “But they still whip up an amazing fish curry!”
His final pitch: “Since 200 of us bought at Groupon.com, we’re each getting $30 worth of Tibetan food for just $15 at Himalayan Restaurant in Chicago.”
With one fell swoop, Groupon raised the ire of people on both sides of the political divide. Chinese netizens slammed the company for what they saw as a “Free Tibet” advertisement, while Tibetan activists accused it of trivialising the suffering of their people.
Vivek Kunwar, co-owner of the Himalayan Restaurant where the ad was shot, was horrified when he saw the advertisement during the commercial break.
“When we saw it, it was an ‘uh-oh’ moment, even for me,” Kunwar told CNN in a phone interview. “There was nothing that we could do .. we were not even involved in the shoot.”
“When we were shown the script, it sounded pretty good. However, the way the ad was made was not in good taste,” Kunwar added. “Our name was used but the way the ad was presented really wasn’t done very well. It could offend people definitely.”
Concerned that Tibetans and Chinese are unhappy with the ad, Kunwar expresses concern about future business, “It makes Groupon look bad, it makes us look bad and it was not the way it should’ve been done.”
While Kunwar angrily awaits that call from Groupon, the site’s founder Andrew Mason, has added oil to fire by defending the ad:
“The gist of the concept is this: When groups of people act together to do something, it’s usually to help a cause. With Groupon, people act together to help themselves by getting great deals. So what if we did a parody of a celebrity-narrated, PSA-style commercial that you think is about some noble cause (such as “Save the Whales”), but then it’s revealed to actually be a passionate call to action to help yourself (as in “Save the Money”)?”
Meanwhile, renowned marketing guru Rohit Bhargava, awarded Groupon with the “Worst Marketing Strategy” of Super Bowl XLV:
Groupon is a brilliant site with an amazing team behind it. I have corresponded personally with their team and know for a fact that the organization is filled with dedicated and personable employees … which makes their Super Bowl effort even more disappointing. The strategy behind their campaign is explained well by founder Andrew Mason on the Groupon Blog … however without the context of the thinking behind the ad, their 30 second spot in isolation came off as offensive, amateurish and insensitive. These are not qualities which represent Groupon at all, yet the ad has gone virally wrong, which is a reminder that sometimes the same creative developed as part of an online campaign can’t simply be translated to another environment and retain its meaning. The Super Bowl needed a different creative execution, and it’s a lesson Groupon is learning the hard way.
Back here in Shanghai, Marc van der Chijs, CEO of Spil Games Asia and co-founder of Tudou.com called Groupon’s ad “Dumb, dumber, dumbest”. Marc adds,
“Over the past weeks I have followed Groupon trying to set up its business in China. Not only from the press, but also from friends that interviewed there for one of the 1000 jobs that they plan to fill over the next couple of weeks, and of course from things I heard from other Groupon clones. I actually gave them a decent chance because of their plan to partner with Tencent and their commitment to invest hundreds of millions of dollars in the Chinese market. The fact that the biggest Chinese clones are working together to compete against Groupon could be a potential problem, but one that can be solved with the amount of money Groupon has available.
But now they dug a big hole for themselves to fall into: how stupid can you be to air a pro-Tibet commercial during the Superbowl to promote your company? Not only does it upset a lot of their US customers, but it may get Groupon China in trouble as well. Tibet is one of the most sensitive issues in China and whatever you think about it, you should not touch it as a foreign company if you want to run a business here. Given the size of Groupon’s investment the company is surely on the government’s radar and they will see this ad as well. And what would Tencent do? Would they risk working with a partner that is making beginners mistakes even before any contracts are signed? To be continued, I am sure.”
UPDATE: We’ve found the ad agency responsible for the tragicomedy.