Groupon will fully repay people who bought Tissot brand watches on its Chinese website Gaopeng.com, and give as much as 400 yuan ($63) in additional compensation, according to a statement sent to AFP.
“We are deeply sorry about the inconvenience the matter caused for consumers,” said Groupon, which launched its Chinese venture in partnership with local Internet giant Tencent in February.
Groupon is facing tough competition in China, which has the world’s largest Internet population with more than 500 million users, since many Chinese firms have already started sites offering discounts for group purchases.
The US company has accused the watch supplier, Tianjin Jinsan Commercial and Trade Co, of providing allegedly fraudulent information for claiming to be a sales agent for Tissot. It has reported the case to police.
Sarah Shen, a Shanghai-based spokeswoman for Swatch Group, the Swiss firm that owns the Tissot brand, confirmed to AFP that the watches were copies.
Groupon said the incident had exposed “negligence” among its own staff for failing to examine merchants.
It offered the men’s sports watches at 690 yuan each in a deal in October, saying the original price was 3,500 yuan, according to its website. The deal ended with more than 200 buyers.
The company debuted on Wall Street last Friday, with its shares jumping more than 30 percent after it raised $700 million in the biggest initial public offering by an Internet company since Google.