The big news today is 360Buy.com (aka Jingdong Mall) has announced it is planning an IPO which hopes be in the range of $4-$5 Billion US, which could be the richest IPO to date. The public offering would eclipse the recent LinkedIn at $400 Million, or even Google all time record of $1.9 Billion back in 2004.
With Online Shopping estimated to be $100 Billion market by 2014, 360Buy is a major force in the Chinese eCommerce market. Unlike China’s reigning eCommerce King, Alibaba’s TaoBao, which provides the platform which allows multiple store owners, product and service providers, can sell products direct to consumers, (along the eBay model), 360Buy sells its own products direct to consumers. They then ship the products directly from more than 50 warehouses across China. They also handle around 70% of their own deliveries.
They actually send delivery people out to customer homes on the subway. Then each delivery person has a Satellite GPS tracking device which allows the customer to track their delivery, and even gives them the cell phone number of the delivery person. Now, “That’s A Service!”
Bankers in Beijing are understood to be meeting with 360Buy next week to discuss the share sale.
However, the US market has not turned out to be a sure bet for many Chinese internet companies in recent months. It would be the latest in a series of Chinese internet companies trying to sell shares to US investors.
Recent offerings by e-commerce site DangDang and social networking site Renren saw spikes in share price on their debuts, but have since seen interest wane.
Another concern is that some US investors are being cautious after a series of fraud and accounting-related scandals were discovered in US-listed Chinese companies.
“People look at Jingdong right now and think, wow these guys are a powerhouse, they are a monster Amazon and Ebay all wrapped into one. There’s a bit of taint on Chinese internet stocks right now, but I don’t think it’s a well deserved taint. The smart money will understand that the opportunity here vis-a-vis the reward far outweighs the risk.” – Michael Clendenin – RedTech Advisors
In an excerpted from an article by Yin Sheng in the current issue of Forbes China, the licensed Chinese-language edition of Forbes, it was reported:
Not many young Internet companies are able to catch the attention of Wal-Mart. Yet Chinese e-commerce site 360buy earlier this year held talks involving hundreds of millions of dollars of investment by the global retail giant.
Ultimately, however, 360buy’s founder Liu Qiangdong chose to move on, and instead accepted $1.5 billion of funds from a group of investors led by Digital Sky Technology, which has successfully invested in Internet companies such as Facebook.
Liu with an estimated 20% of the stock has landed on the new Forbes China Rich List this year, with estimated wealth of $1.2 billion.
eCommerce rival Alibaba, led by fellow billionaire Jack Ma (worth $1.9 billion on this year’s list) has come out with their own TaoBao Mall, in direct competition with 360Buy which has the #1 market share, with 33% of the market. 360Buy is #2 with 12% of the market.