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VANCL in China
VANCL Chinese E-Commerce companies latest Business & Financial news from Doug Young, the Expert on Chinese startups, (former Journalist and Chief editor at Reuters)

News Digest: December 6, 2011

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The following press releases and media reports about Chinese companies were carried on December 6. To view a full article or story, click on the link next to the headline.

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◙ Apple’s (Nasdaq: AAPL) iPhone 4S To Go On Sale In 7 Cities on December 16 – Source (Chinese article)

◙ Bank of China (HKEx: 3988) To Step In As Saab Part Owner: Source (English article)

◙ Vancl Completes USD 230 Mln Sixth-Round Funding (English article)

◙ KKR Announces Investment in China Outfitters (Businesswire)

◙ Chow Tai Fook May Beat Prada (HKEx: 1913) to 2011 HK Record in $2.8 Billion IPO (English article)

360Buy $5 Bln IPO Plan Looks Like Desperation 京东商城50亿美元上市计划凸显绝望

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I have just one word to describe the news that leading Chinese online merchant 360Buy will try to raise up to $5 billion in the largest-ever Internet IPO for a Chinese company in the US: desperation. (English article; Chinese article) But I have to at least give this company credit for trying to get to market before a looming Chinese Internet bubble bursts, which could rapidly wipe out billions of dollars that investors have pumped into 360Buy, which officially calls itself Jingdong Mall. This is the company that surprised the world in April when it raised a whopping $1.5 billion — a record for a Chinese Internet company — from an investor group that included Russia’s Digital Sky Technologies, better known for its investment in Facebook. (previous post) Digital Sky’s chief later tried to justify the size of the investment, estimating that 360Buy could have a market cap of $10 billion — more than double that of most to Chinese Internet firms and trailing only top players Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU) (previous post) Never mind the fact that 360Buy was losing money, which will become quite clear to everyone when if and when it files its IPO prospectus. Lots has happened since that landmark investment five months agol. Most notably, competition in the e-commerce space has heated up considerably with the influx of billions of dollars in new investment. Money-losing online promotions offering goods at ridiculously low prices appear almost daily, and early signs of distress have begun to appear with big names like group buying site Gaopeng and clothing retailer Vancl laying off staff (previous post). 360Buy showed its own signs of distress last month when it abruptly severed relations with e-payments provider AliPay in a move to cut costs. (previous post) I suspect Digital Sky and the other investors from that $1.5 billion funding round are starting to panic, and are now in a race against time to get back some of their investment before China’s bursting Internet bubble is impossible to ignore. If I were a gambler, I would say this offering will raise $1 billion at the most, and quite probably less, if it even makes it to market. The way things are rapidly developing, the company will be lucky to get a valuation of $5 billion.

Bottom line: 360Buy’s sudden rush to raise up to $5 billion in a US IPO is a sign of desperation, as investors look for quick returns before China’s Internet bubble bursts.

看到京东商城要去美国上市筹资50亿美元的消息，我只想用一个词来描述我的看法：绝望。京东商城是中国最大的购物网站，这个上市计划一旦成功将创下中国互联网公司赴美上市筹资额的历史之最。不过，对京东在中国互联网行业泡沫行将破裂前，尝试借助资本市场的努力，我还是至少要给予褒奖。中国互联网泡沫的破裂可能导致投资者对京东商城倾情投入的数十亿美元迅速灰飞烟灭。今年4月，京东商城从包括俄罗斯风投公司数字天空技术（Digital Sky Technologies）的投资者财团成功筹集到15亿美元资金，创下中国互联网公司对外定向筹资的纪录。这让外界倍感意外。数字天空技术更出名的行动当属投资Facebook，该公司後来试图为其投资规模找出理由，称京东商城的估值可能高达100亿美元，较大多数其他中国互联网公司的市值高出一倍有余，仅次于百度和腾讯等龙头企业。不要介意京东商城正在亏损，这一事实在这家公司发布上市招股书的时候将大白天下。在五个月前获得标志性巨额投资之後发生了很多事情。最值得关注的是，随着数十亿美元投资的流入，电子商务行业竞争显着升级。几乎每天都能看到提供荒唐低价商品的赔钱促销活动，随着团购网站高朋和服装零售网站凡客的裁员，电子商务行业已经初露危机迹象。上月，京东商城以降低成本的名义突然弃用支付宝，正是前者面临危机的迹象。我猜测，稍早提供15亿美元融资的数字天空技术公司等投资者已经感到痛楚，在不敢无视中国互联网泡沫行将破裂的情况下，正争分夺秒争取上市，以抢先回收部分投资。如果我是一名赌家，我会押注京东商城若决定上市，最多筹得10亿美元，并很可能更少。世事变幻莫测，京东商城若能筹得50亿美元，则需要运气。

一句话：京东商城突然宣布计划赴美上市筹资50亿美元，释放出绝望的信号，机构投资者期待抢在中国互联网泡沫破裂前赶快回收投资。

Related postings 相关文章:

◙ 360Buy — More Details But Still Pricey 京东商城值多少？

◙ 360Buy Cuts Off Alipay As China Internet Froth Builds 京东停用支付宝印证中国互联网泡沫

◙ 360Buy — Are They Really Worth That Much? 京东商城——真值那么多钱？

China Internet Bubble Sees Vancl Dressing Down 中国互联网泡沫见证凡客裁员

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It seems that group buying Internet site Gaopeng isn’t the only one laying off staff as China’s Internet bubble shows early signs of bursting. In the latest indication of trouble, Chinese media are reporting that Vancl, the high-flying online clothing seller, is in the process of cutting 5 percent of its workforce as management tries to “right-size” the company in the run-up to a probable fourth-quarter IPO. (Chinese article) Vancl’s CEO was understandably unwilling to comment on the reports, which cited a number of leaked company e-mails and word of mouth from lower-level company employees. But the reports seem to be credible, and would certainly not be surprising following similar signs of distress from Gaopeng, the Groupon and Tencent (HKEx: 700) invested group buying site now laying off big chunks of its staff, as well as social networking site and IPO candidate Kaixin, which last month warned that the days of rapid Internet growth may be over. (previous post) I have to admit that Vancl’s layoffs did surprise me a little, as just last month I speculated that clothing sellers, due to their more niche-oriented position, may be more immune to the looming Internet bubble than more broadly-focused companies such as group buying sites like Gaopeng and general merchandise sellers like 360Buy. (previous post) But at the end of the day, the bottom line is that China’s Internet space has become way too crowded and overheated, with billions of dollars in new investment entering the market in the last year chasing consumer demand that, while growing, is still far too small to support all those new players. Look for more layoffs in the next few months, as many of the smaller, revenue-poor companies seek to delay their inevitable closure or sale to larger rivals.

Bottom line: Vancl’s recent layoff of 5 percent of its workforce marks the latest chapter in the early stages of a burst for China’s overinflated Internet bubble, with much more to come.

中国互联网泡沫呈现初期破裂迹象，高朋网看来不是唯一一个裁员的团购网站。团购领域又现新麻烦，据中国媒体报导，服饰网络零售品牌凡客诚品正在裁员，规模大约有5%。管理层希望确保公司“合适规模”，以筹备四季度IPO计划。凡客CEO陈年不愿对裁员报导置评。相关文章主要引述了多封公司内部泄漏的邮件与公司低层员工的说法，内容看似可靠。美国团购网站Groupon与腾讯(0700.HK)联手投资的团购网站–高朋网之前已大举裁员，另外准备上市的社交网络开心网也在裁员。不得不承认，凡客裁员有些令我意外。因为就在上个月，我还估计相对于高朋、京东商城等市场定位宽泛的网站，服装零售商因为特殊市场定位，对于互联网泡沫的免疫力可能更好一些。但说到底，实际情况是中国互联网市场已经过于拥挤、投资过热，过去一年已经有数以十亿计美元新投资进入这一市场，押注中国网上购物需求将会大增。这一市场尽管在增长，但还是远远不够支撑那麽多新加入的企业。未来数月，随着很多低营收小企业竭力延迟关张或被对手吞食命运，应该还会出现更多企业跟着裁员。

一句话：凡客近来裁员5%，是中国过度膨胀的互联网泡沫初步破裂的最新事件，未来还会有更多企业跟进类似举措。

Related postings 相关文章:

◙ Tax Evasion Report: Trouble Brewing in Group Buying? 团购被曝逃税 行业整顿或在即

◙ 360Buy Cuts Off Alipay As China Internet Froth Builds 京东停用支付宝印证中国互联网泡沫

◙ Gaopeng, Kaixin Spotlight China Internet Turmoil 高朋网、开心网凸显中国互联网混乱现状

 

Xiu.com Funding Puts Glamor in Online Fashion 服饰类网站前景看好

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Intensifying competition will mean a tough road ahead for broader e-commerce in China, but one area that still looks attractive is apparel, as reflected by a nifty $100 million in new funding for online fashion house Xiu.com. (English article) The tidy amount follows a smaller $20 million funding in March, and this latest round includes such venture capital giants as Warburg Pincus and Kleiner Perkins Caufield & Byers. The funding comes less than a month after online footwear seller Yougou.com received a rumored $450 million in funding from a group that included online search leader Baidu (Nasdaq: BIDU) (previous post), and as another leading online apparel seller, Vancl, gears up for an IPO that should be one of the hottest China offerings in the second half of the year. Apparel is also one of the best selling areas for Alibaba’s Taobao Mall, testifying to the strength of this product category that enjoys strong demand and is relatively less competitive due to higher barriers of entry. By comparison, more general merchandise e-commerce firms like Dang Dang (NYSE: DANG), 360Buy and Wal-Mart-backed (NYSE: WMT) Yihaodian seem to be locked in an increasingly bloody battle where marketing and distribution costs are markedly higher due to the broader array of products and customers they cater to. Of course, it may only be a matter of time before apparel makers get caught up in their own bloody battle for market share. But unlike general merchandise, these companies can more easily find their own niches due to the wide variety of clothing available, which may buffer them somewhat from cutthroat competition. Either way, the group certainly looks like a strong bet for now, and I would expect Vancl to see strong demand when it finally moves ahead with its IPO after broader market sentiment improves.

Bottom line: A new $100 million funding round for Xiu.com testifies to the strength of online apparel, and bodes well for Vancl’s upcoming IPO.

竞争加剧意味着中国电子商务业前路难一帆风顺，但服饰类领域看似仍具吸引力，时尚购物网走秀网（xiu.com）新一轮融资1亿美元就是例证。走秀网今年3月曾获2,000万美元投资，而本次又获美国华平投资集团（Warburg Pincus）和Kleiner Perkins Caufield & Byers等风投巨头投资。不到一个月前，鞋类销售网优购网（Yougou.com）据传获得4.5亿美元融资，投资方包括网络搜索巨头百度<BIDU.O>。凡客诚品正在准备首次公开募股（IPO），有望成为下半年最热门的中国上市企业。服饰也是淘宝商城最热销的领域之一，证明此类产品需求强劲，由於进入门槛较高，竞争相对没有那麽激烈。相比之下，销售日用百货的电子商务企业当当网<DANG.N>、京东商城和沃尔玛<WMT.N>投资的1号店似乎陷入激战，由於其产品和消费者范围更广，市场营销和渠道成本也明显更高。当然，服饰类企业激烈争夺市场份额或许也只是早晚的事情。但与一般商品不同，服饰类选择众多，企业更容易找到其小众定位，为其竞争提供了缓冲空间。目前看来，服饰类电子商务前景光明，我认为，市场情绪提振後，当凡客诚品最终进行IPO时，有望获得积极认购。

一句话：走秀网新一轮融资1亿美元证明，网络服饰销售颇具潜力，对凡客诚品即将IPO也是吉兆。

Related postings 相关文章:

◙ Belle, Baidu See Beauty in Online Shoe Store 百度和百丽投资优购网或为明智之举

◙ 360Buy — More Details But Still Pricey 京东商城值多少？

◙ Wal-Mart Buys Into China E-Commerce 沃尔玛进军中国电子商务

Taobao Mall Takes Hit with Drug Sale Ban 中国规范网络售药 或重创淘宝商城

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Alibaba’s Taobao Mall, the B2C portion of Taobao that was split off into a separate entity under a restructuring last month (previous post) looks set to take a hit, as China moves to clean up its unruly pharmaceuticals industry by banning the sale of drugs online. (English article) The campaign looks very much like similar ones that Beijing has launched from time to time, and in particular resembles a drive a few years back to stop hospitals from making bogus claims through advertisements. That campaign saw traditional and new media companies like Focus Media (Nasdaq: FMCN) and Sina (Nasdaq: SINA) suffer as hospitals and clinics, in search of more revenue as they were freed from state support, had become some of the biggest buyers of advertisements at the time. It’s hard to say how big the impact will be on Taobao from this latest drive to regulate drug sales, but I’m guessing such sales probably comprise a fair share of its transaction volume, probably somewhere in the 5-10 percent range. The loss of commissions from such sales won’t be devastating, but will certainly deal the company a setback, especially as it prepares for in IPO which I expect will come in the next year as Taobao investors, most notably Japan’s Softbank, clamor for some return on their investment. The ban could also have an impact on some other e-commerce sites, though many of the big ones, such as Dangdang (NYSE: DANG) and Vancl, seem to be steering clear of the drug sector and focusing on less controversial products like books and clothing. Still, this latest ban is just the latest reminder that nothing in China is certain, either online or offline, and these kinds of periodic “clean-ups” can hit just about anyone at any time.

Bottom line: Alibaba’s Taobao Mall will take a hit with China’s latest crackdown on online drug sales, taking away some of the company’s momentum as it prepares for an IPO as soon as next year.

中国正对网上售药进行治理，以规范药品行业，阿里巴巴旗下的淘宝商城料将受到影响。这与中国政府以往不时推出的行动很像，尤其是几年前，因为医院和诊所改制，不再得到国家资金支持，为寻找创收渠道，部分医院诊所成为广告商最大客户之一，而当时，政府发起禁止医院打广告夸大药效的行动，让分众传媒（Focus Media）<FMCN.O>和新浪<SINA.O>等媒体公司遭重创。很难说这次规范药品行业销售行动对淘宝的影响有多大，但我猜测，淘宝的交易额将受到一定影响，比例可能在5-10%左右。此类销售的佣金损失不会是毁灭性的，但肯定对淘宝商城不利，尤其是该公司正准备上市。我预计，由於淘宝投资者，尤其是日本软银，急於获取投资回报，公司将在明年上市。这一禁令也可能影响到其他电子商务网站，但当当网<DANG.N>和凡客诚品等许多大型平台正清除售药类别，重点发展图书和服饰等争议较小的产品。但此事提醒我们，在中国没有什麽是确定的，无论是线上还是线下，这些不时进行的“严打行动”可能在任何时间，影响到任何人。

一句话：中国近期严打网络售药，阿里巴巴旗下的淘宝商城或受创，在公司准备进行IPO之际，可能对其造成一定影响。

Related postings 相关文章:

◙ Taobao Split: Separating Wheat From the Chaff 淘宝一分为三 如何取其精华

◙ Alibaba, Tencent Join Mobile OS Bandwagon 阿里巴巴和腾讯进军移动操作系统领域

◙ Alibaba, eBay Lovefest Over as eBay Rethinks China 阿里巴巴和eBay的蜜月期结束

Belle, Baidu See Beauty in Online Shoe Store 百度和百丽投资优购网或为明智之举

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E-commerce in China is hot right now and apparel seems to be the latest hot area based on the latest deal involving online footwear seller Yougou. News on the investment is a bit conflicting, but consensus seems to be that Yougou has received hundreds of millions of US dollars in a new round of funding, and some are specifying the amount is around $450 million, with investors including Hong Kong-listed footwear distributor Belle International (HKEx: 1880) and Internet search leader Baidu (Nasdaq: BIDU). (English article; Chinese article) I haven’t been a big fan of Baidu’s e-commerce initiatives in the past, most notably its failed online store You’a, but this one certainly looks like it could have some potential with both a big Internet name behind it in the form of Baidu itself and a big apparel manufacturer and retailer in the form of Belle. This latest investment comes amid a recent flurry of activity in the e-commerce sector that points to its strong growth potential. Wal-Mart (NYSE: WMT) bought into online retailer Yihaodian in May (previous post), and leading online apparel seller Vancl is reportedly in the process of an IPO that many believe will do well despite weak investor sentiment toward Chinese companies in general. Leading Web commerce company Alibaba also made  headlines last month when it split its Taobao unit into three pieces, a move aimed at breaking out the more profitable online B2C store business from the more problematic online auction C2C site. (previous post) All these companies are clearly chasing a growing Chinese Internet market that now numbers more than 500 million users, many of whom like to shop online as such transactions become easier and provide more choice and quality guarantees to traditional brick-and-mortar stores. As the market develops, Yougou looks like it’s in a nice mainstream niche and should be an interesting company that, depending on its finances, could make an IPO in the next 2-3 years.

Bottom line: Online footwear seller Yougou looks like a smart investment for backers Baidu and Belle International, with potential for big growth and an IPO in the next 2-3 years.

电子商务目前在中国非常热门，鉴於鞋类销售网优购网日前获投资，服饰似乎是最新的一个热门领域。相关新闻说法略有些矛盾，但共识是，优购网在新一轮融资中筹到上亿美元，一些报导称，该融资具体金额约为4.5亿美元，投资者包括香港上市的鞋类销售商百丽国际<1880.HK>和网络搜索巨头百度<BIDU.O>。一直以来，我并不看好百度的各种电子商务举措，尤其是失败的百度有啊网站，但这次百度和百丽联手投资看似颇具潜力。电子商务领域近期各种动向均表明该领域极具增长潜力。沃尔玛<WMT.N>5月收购中国在线零售商1号店股权，有报导称凡客诚品正在准备首次公开募股（IPO），许多人认为，尽管对中国企业投资者情绪普遍偏弱，但凡客诚品IPO或会有良好表现。阿里巴巴集团上月将淘宝网分拆为三家独立公司，意在将盈利的B2C业务同问题重重的C2C业务分离。上述公司显然都加紧在中国互联网市场发展步伐，中国网络用户目前已突破5亿，许多人喜欢网上购物，因为交易更容易，选择更多，而且有质量保证。随着网购市场的发展，优购网看似发展方向不错，根据其财务状况，公司或会在未来两三年上市。

一句话：优购网增长潜力巨大，并有望在未来两三年上市，百度和百丽投资优购网似乎是明智之举。

Related postings 相关文章:

◙ Wal-Mart Buys Into China E-Commerce 沃尔玛进军中国电子商务

◙ Taobao Split: Separating Wheat From the Chaff 淘宝一分为三 如何取其精华

◙ 360Buy — A $10 Bln Company? 京东商城价值100亿美元？