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<- December 21, 2011 ->

Rumor: Gaopeng Closes Several Local Branches

National Business Daily, 12/21/11

An employee with, Groupon and Tencent's (0700.HK) group buy joint venture, revealed recently that Gaopeng's branch office in Baoding, Hebei province closed on December 8, followed by the closure of Gaopeng's office in Nanchang, Jiangxi province on December 16.

According to the source, Gaopeng's branch office in Zhejiang province's Wenzhou was also recently shut down, and soon so too will be its Changzhou branch in neighboring Jiangsu province. At its peak, Gaopeng operated 128 branches across the country, a number which the source said has fallen to 39.

Gaopeng's branches in Baoding, Wenzhou and Nanchang employed a total of 24 staff, all of whom have now been laid off. Aside from one remaining supervisor and one sales staff who will soon be transferred to another branch office, the remaining three employees at Gaopeng's Changzhou branch will be laid off next week.

One of the Changzhou-based employees has said that Gaopeng's head office has been steadily decreasing commissions following mass lay-offs in August this year.

Gaopeng says that the recent closures are part of normal operations, adding that its Wenzhou employees were compensated in line with China's labor laws and the company's own policies. Some previous employees from Gaopeng's Baoding and Nanchang branch offices, however, say that compensation offered by the company was below the required amount, an assertion to which Gaopeng has yet to respond.

Editor's Note: For more information on this topic, please see "Rumor: Gaopeng Slashes Workforce by One-Third," MD 8/25/11 issue.

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