China's answer to Amazon readies IPO
- Source: Global Times
- [08:03 May 19 2010]
- Comments
By Li Qiaoyi
Dangdang.com, an online retailer in China similar to Amazon.com, has chosen two banks as underwriters for its IPO in the US, China Business News (CBN) reported Tuesday.
Morgan Stanley and Credit Suisse have been hired by Dangdang, CBN reported, quoting sources close to an unnamed investment bank.
The company will be listed in the US this year at the earliest, according to CBN.
Dangdang, the first online bookstore in China, launched in 1999 and is expected to be the first business-to-customer (B2C) company to go public in 10 years.
The company will continue to achieve profits over the next two to three years with annual sales expected to reach 10 billion yuan ($1.46 billion), Li Guoqing, CEO of dangdang. com, was quoted by CBN as saying.
The company, which was not profitable until March 2009, has seen rapid growth since then. Its online book sales rose more than 100 percent year-on-year to exceed 2 billion yuan ($292.90 million) in 2009, Li said at the end of last year.
In the first quarter of this year, Dangdang comprised 10.7 percent of the country's total B2C online shopping market in terms of turnover, according to Beijing-based iResearch, an online market research firm.
Dangdang's growth is consistent with the rapid growth seen in the overall e-commerce market in China.
China's e-commerce market, including the online shopping market, saw more than 1 trillion yuan ($146.45 billion) in turnover in the first quarter, according to iResearch.
China's e-commerce is growing at a much faster pace than in other regions of the world, Michael Buck, director of the global small- and medium-sized businesses online market at Dell, said in an interview with the Global Times.
"It took the US 15 years to get to 60 percent e-commerce penetration," while China is not expected to take as long to reach a similar level, given Internet penetration in the country on the rise, Buck said.
Dell, a major online IT vendor in China, saw its online business in the country last year double from 2008, according to Buck.
The increased prevalence of 3G means selling and buying via mobile devices will be a huge trend in China, he added.
China has the world's largest number of Internet users, totaling 404 million, the Xinhua News Agency reported May 1, compared to 384 million at the end of 2009. Of the 404 million, 233 million use handsets to get on the Web.
While showing confidence about the e-commerce growth in China, Buck said online payments and fraud are two main concerns.
"The payment element and the trust have been the biggest obstacle for adoption of eBay and other platforms outside of China. As soon as you fix this, customers start to trust it and increase the use of online retail a lot," Buck said.
