Major Chinese E-Commerce Companies Seeking U.S. IPOs
by: Renaissance Capital IPO Research
September 11, 2011
Rumors are circulating that a number of Chinese e-commerce IPOs (several of which may raise over $1 billion) are prepping to list in the US over the next 12-18 months. These companies are hoping to tap into investors' interest in a large and still fast-growing market. China has the world's biggest Internet market by number of users, and research firm Forrester Research estimates that total web sales in China are likely to triple to almost $160 billion in 2015 from about $50 billion in 2010.
360buy.com, also known as Jingdong Mall, is one China's largest business-to-consumer (B2C) e-commerce platforms, with revenue expected to reach RMB 28 billion ($4.4 billion) in 2011. The online retailer, which sells everything from electronics to flight tickets, is reportedly seeking to raise $4-5 billion in its initial public offering, making it the largest ever Chinese Internet IPO and possibly the largest in the world if it launches before Facebook. According to Analysys International, 360buy.com captured 10% of the Chinese B2C market in 1Q11, second only to Alibaba's Taobao.com (31%). There has been a lot of activity in this space, including Walmart's recent purchase of a stake in Yihaodian, a competitor to 360buy.com. On Wednesday, it was reported that 360buy.com was initiating meetings with bankers with the intention of completing its IPO in 2012.
Vancl.com is China's largest online clothing retailer, with sales expected to rise fivefold this year to RMB 10 billion ($1.6 billion). Vancl.com's IPO has been rumored since 2010, with the latest reports suggesting a $1 billion deal scheduled for the second half of 2012. The company's backers include IDG Capital Partners, SAIF Partners and Qiming Venture Partners.
Xiu.com, operated by e-commerce firm Shenzhen Zouxiu Network Technology, is also reportedly targeting a 2012 IPO in the US. The Chinese luxury good site targets RMB 1 billion ($156 million) in sales for 2011, and believes 2012 revenue can reach RMB 2-3 billion ($313-625 million). Xiu.com raised $100 million in August from private equity firm Warburg Pincus and venture capital firm KPCB China.
Recent IPO China E-Commerce Dangdang ( DANG), often touted as "China's Amazon" given its roots as an online bookseller, was initially a hot deal (87% first day pop) but has since fizzed owing to heightened competition from sites like 360buy.com, which has pressured Dangdang's margins. The stock now trades -54% below its offer price of $16.
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