Top Brand Failures due to Differences in Culture

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Would a company which is successful in one part of the world, be successful in other part too ? The answer to this question is Maybe or Maybe Not. Apart from difference in countries and geographies, there is one very major difference in different parts of the world i.e Culture.

Here are few examples of brands and businesses which failed because of Culture.

1. Groupon


Group-buying deals site Groupon in Aug 2011, shut down 13 of its outlets in China and fired over 300 full-time staff. Groupon now holds a minority share, of the local Chinese daily deals website site Gaopeng which it launched in partnership with Tencent. Groupon is an example of a western internet company to fail in china. It can be inferred that the company lacked local understanding which resulted in its failure

Lack of local understanding - One example is Groupon’s sales team in China. In the beginning it urged that the partnering vendor split profits 50:50. It neglected the group buying attitude of Chinese customers. With many seasoned players in the market, the upper hand lay with the vendors when negotiating with group buying operators and the percentage of profit is only 10% as opposed to 50%. Local vendors were so taken back by Groupon’s aggressive sales tactics that they often told the company’s sales people to calm down and come back later with more realistic expectations.