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Tag: vipshop

  • The new niches in China’s ecommerce market

    The new niches in China’s ecommerce market

    Alibaba’s sales is only 5 percent of total retail in China and JD.com’s sales of electronics products represent about 2 percent to 5 percent of total electronics retail as well, according to Dangdang.com’s CEO Li Guoqing.

    If you only look at the Chinese ecommerce giants’ recent financial report, most people would agree that the competition has settled because Alibaba alone has accounted for about 80 percent of the market share in online shopping sales. The combined sales from Alibaba and JD.com have close to about 90 percent of the Chinese online retail market.

    However, at least one executive of a Chinese e-retailer thinks the position of those leaders is not secure. “The size of the business is not equal to competitive advantage and competitive threshold.  The market will be settled only if the marketing leaders have some unique edges and generate difficult barriers to entry,” says Li Guoqing, cofounder and CEO of Dangdang.com, in a speech in One Thousand Ecommerce Professionals Seminar in China:

    Alibaba’s sales only account for about 5% of retail sales of China and that is not a enough barrier to entry. At same time, JD.com’s electronics sales only represent 2% to 5% sales of electronics products in China. If some companies get a right new business model, there are still plenty of chances to beat those current leaders.

    Li says people seldom know Vipshop, the number 4 internet retailer China 500, and Yhd.com, the number 7 internet retailer China 500, three years ago, but now they have become ecommerce leaders in their categories in China.

    In other words, new horizons may be coming for niches within China’s ecommerce market in the same way that we see companies like Warby Parker and Zappos coming up in the USA. Keep on a lookout for these small well-branded niche companies in China, while you look past the big guys like Alibaba and JD.

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  • Vipshop doubles income

    Vipshop doubles income

    Chinese online discounter Vipshop Holdings has doubled its profit in the second quarter to June 30.

    It reported total net revenue soared 77.6 per cent to US$1.5 billion, its gross profit by 78.6 per cent to $360 million and its income by 192.5 per cent to $70.6 million.

    Chairman and CEO Eric Shen said the strong quarter was largely driven by expansion of mobile operations and continuing growth in customers and orders in its our core flash sales business.

    “Our smooth and swift execution on the mobile front – with 76 per cent of our gross merchandise value now coming from mobile devices – has helped set us apart in the market, and further clarifies the unique value of our flash sale model for on-the-go shoppers,” he said.

    “Our cross-border expansion, supplier financing initiatives and logistical enhancements have further improved our ecosystem for brands and customers. Going forward, we will focus on expanding our market share and scaling our operations through enhancing the customer shopping experience, attracting new customers and elevating our brand value in China and globally.”

    Donghao Yang, CFO, said Vipshop was on track to meet its 1.5 million sqm warehouse target by the end of the year.

    “We also continue to expand our local delivery and services network, which we are currently using to deliver over 70 per cent of our total orders across almost all provinces in mainland China.”

    The number of active customers for the second quarter of 2015 increased by 47.2 per cent to 14.2 million from 9.7 million in the prior year period. The number of total orders for the second quarter of 2015 increased by 55.2 per cent to 44.9 million from 28.9 million in the prior year period.

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  • Vipshop takes stake in Ensogo

    Vipshop takes stake in Ensogo

    Chinese eCommerce company Vipshop has taken a cornerstone stake in southeast Asian online retailer Ensogo.

    The deal will open the way for Vipshop’s inventory to be offered on Ensogo and for the two parties to share commercial and business expertise to drive Ensogo’s growth.

    Australian Stock Exchange listed Ensogo has also raised US$7.5 million from the issue of nearly 60 million shares to equity fund investor Ward Ferry, through a subsidiary WF Asian Reconnaissance Fund.

    Ward Ferry will now hold a 10.6 per cent stake and Vipshop 12.2 per cent. The total capital raised in the two transactions is approximately $12 million.

    Ensogo CEO Kris Marszalek said to have an investor of the caliber of Ward Ferry was exciting.

    “The additional AU$10m of funding means we are perfectly positioned to execute on the tremendous opportunity our strategic relationship with Vipshop brings, as well as on the enormous opportunity for eCommerce in Southeast Asia.

    “As a part of the (Vipshop) strategic investment, the companies will also enter a strategic operating partnership, whereby Ensogo will have access to Vipshop’s vast volume and selection of existing inventory, all to be made available for immediate shipping. The companies also intend to cooperate in the areas of logistics, merchandising, technology, marketing and user acquisition; the very expertise, which enabled Vipshop to scale its revenues from US$32 million in 2010 to US$3.77 billion in 2014,” said Marszalek.

    “We’re excited to be in the perfect position to build the Vipshop of Southeast Asia.”

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