Lashou

» see lashou.com as it lived, on the wayback machine

~ the last words ~

The name that reached me was Meituan. That is how a Chinese company usually arrives from where I sit: late, already enormous, already the answer, with no visible trace of whatever it had to beat to get there. I did not know there had been a fight. Lashou is the company on the other side of it, and for about one quarter in 2011 Lashou was the one winning.

It started in March 2010, founded by Wu Bo, in the same month as most of its competitors. Groupon had proved the format in the United States and China copied it at a speed that is hard to describe in the language of ordinary competition. Money followed immediately. Fifty million dollars in December 2010, another $110 million in April 2011, at a valuation of $1.1 billion. Three million registered users by that January, deals running in more than three hundred cities.

In October 2011 Lashou filed to list in New York and told the regulator it was the largest group-buying service in China. The roadshow was postponed the following month. The reason given publicly was corporate developments and the reason reported was the accounting. It never went out. That single event is the hinge everything after it turns on, because the whole model was a race to buy market share with other people's money, and Lashou had just been cut off from the supply.

~ the record ~

~ the thousand-group war ~

Chinese business writing has a name for this period. Qian tuan da zhan, the war of a thousand groups, which undersells it. Between 2010 and the end of 2013 something like 6,246 group-buying sites were founded in China. By January 2014 there were 213 left. More than nine in ten were gone inside four years, and the survivors were the ones whose backers had the deepest pockets rather than the best product.

The mechanics were brutal in a specific way. Every site sold the same restaurants at the same discounts, so the only levers were sales headcount on the ground and how much of each transaction you handed back as subsidy. That makes the whole sector a fundraising contest wearing a commerce costume. Lashou hired aggressively into the boom and then had to cut just as aggressively, and Wu Bo left the company he had started.

~ the listing that never happened ~

From October 2011 to the end of June 2012 Lashou lost 55 percent of its market share by revenue. It went from first in the country to sixth in nine months. By April 2013 its monthly sales were around 170 million yuan, roughly half of what the leader was doing.

Nothing about this is mysterious once the IPO is off the table. A company burning capital to hold first place either raises again or stops holding first place. Meituan and its peers kept raising. Lashou had gone to the public markets and come back empty, with an accounting question attached to its name, which made the next private round harder than the last one instead of easier.

~ what sanpower bought ~

In October 2014 the Jiangsu conglomerate Sanpower Group bought it. Talks had started in August, an agreement was signed in September, and the deal was confirmed on 20 October. The price was never disclosed, which in this context is its own disclosure. Sanpower was a brick-and-mortar retail group buying an internet company to become an internet company, and the announcement talked about building the largest online-to-offline platform in the world.

Lashou said the brand would keep operating independently and the staff would stay in place. In 2017 the brand was retired anyway and the site was renamed Tianxia Lashou. People who worked there afterward described a company run in the style of a state enterprise, which is not a compliment in Chinese tech writing and is close to fatal for a business whose only edge was speed on the street.

~ the unpaid months ~

On 11 July 2018 more than a hundred employees learned they were out. They were owed two months of wages and their social insurance contributions had not been filed. What remained was roughly twenty people keeping the lights on. The last post on the company's official account is dated 8 April 2018. Users kept writing in about account balances that were never refunded.

There is no closing notice and no final day, nothing to link to. The corporate registration still said in operation a year later, decorated with hundreds of risk flags. The archived homepage is byte-for-byte identical from September 2018 through January 2020, which for a site whose entire content was today's deals is the clearest death certificate available: nothing changed, for sixteen months, on a page that existed only to change daily. The domain still resolves. Nothing answers on it.

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