The clear market leader for mobile-based shopping in China is Taobao, the iconic consumer-to-consumer shopping mall from Alibaba that’s been rocking China for a decade. In terms of the value of mobile purchases among Chinese consumers, Taobao leads with 75.1 percent market share. Some of that is from the parent company’s B2C marketplace Tmall.

In second place in this sector is Jingdong (formally called 360Buy), which is also China’s second largest B2C e-tailer. Its share of the mobile sector is a lot lower than its share of the overall China B2C shopping market, suggesting that Jingdong – and, indeed, all other such Amazon-like brands – needs to seriously sharpen up its mobile strategy. I notice that, if we again compare mobile spending share with overall market share, it’s only two fashion e-commerce companies that are punching above their weight when it comes to mobile shoppers – own-brand clothing e-store Vancl and specialist handbag site Maibaobao.

Here’s the market share pie chart:

A fairly slow shift to m-commerce

iResearch estimates that Q1 2013 will see Chinese mobile netizens spending a total of RMB 26.6 billion ($4.29 billion) in all of these e-commerce companies. That indicates that 2013 will indeed be the biggest ever year for mobile commerce in China – possibly exceeding the research firm’s earlier estimates of $15.7 billion for the entire year:

In Q1 2013, we see that PC-based shopping still dominates the country’s e-commerce sector , but mobile is rising fast, anticipated to reach 7.6 percent of purchases in the first quarter:

If you can handle any more massive numbers you might like to know that China’s entire e-commerce industry looks set to be worth $177 billion in 2013. Keep an eye on our ‘e-commerce in China’ tag to get more news on this massive market.

(Source: iResearch)

In Vietnam, we’ve got lots of homegrown daily deals and e-commerce sites, as well as a few foreign companies like Rocket Internet and China’s Vancl entering the fray. So it’s pretty hard to find unique models like Shopby in the mix.

Shopby, which is basically a social commerce site directed at daily deals based in Hanoi, Vietnam, beta-launched in April 2012, and fully launched in December 2012. It’s a team of nine people. With currently over 11,000 users and approximately 500 to 5,000 visits per day, depending on deals and timing. It has 30 deals at a time and each lasts anywhere from one day to a month, mostly focused on fashion and food and beverage. The website is actually a pet project of SmartOSC, whose main business is building projects with Magento, an e-commerce platform. E-commerce is in their blood.

The idea of social commerce as used by Shopby, according to CEO Hieu Nguyen, is as he says:

A central place to bring people together who are buying the same things. People can make purchases based on interests of others on their social graph. Usually, customers make a decision to buy an item based on recommendations and interests from the people most relevant to them.

Outside of the social graph side of things, Shopby also allows users to follow shops they like and, of course, follow friends. Users can create their own new account, but mainly they use Facebook to login.

Shopby does have some competitors in the space, including Zaia.vn and Guu.vn but they don’t exactly approach it from the same social perspective. With Shopby, businesses and users can upload their own deals directly onto the site – these deals are only displayed if they are relevant to users in their social circle. Businesses can check statistics on user behavior and reaction to their deals. Looking to the future, Hieu says:

Currently, we’re in phase one where users can post deals they like. But in phase two, we’ll allow users to request deals. Thus requesting discounts on certain items in a shop. Phase two will come out in June.

At the moment, Shopby is in its growth phase so revenue is nil. In the future, Hieu is looking to grow it into a marketing platform, charging businesses for listings – and there’s a current stealth model for phase two of the company.

The integration of third-party clothes onto Vancl itself marks a strategic shift for the company. When V+ was launched back in 2010, Vancl executives explained that Vancl.com would remain a “brand shop” while V+ was more like an online department store or mall. But if Vancl.com is now selling other brands, it begs the question of whether V+ has a future or whether the company is planning to completely integrate it into Vancl.com and has abandoned the dream of single-brand e-commerce platform.

Vancl has not announced any such plans, but clothing vendors that spoke with Sina Tech told the news portal that privately, they had been advised that Vancl would become a more traditional e-commerce platform rather than remaining a branded shop. On the other hand, though, the company does not seem to be advertising or promoting any of the third-party products on Vancl.com at all, so customers can only find them via searches at present.

So is Vancl really headed towards full-on integration with V+ and the shift to being an e-commerce platform rather than a clothing brand? Only time will tell. But it certainly seems as though the company is headed in that direction.

(via Sina Tech)

The figures suggest that China’s e-commerce scene will not grow exponentially in 2013, and growth will slow every year as the realistic saturation point is finally reached. While the growth in online shopping in the country was over 100 percent from 2011 to 2012, it’ll be down to just 22.8 percent expansion from 2015 to 2016. By 2015, Chinese e-tailers will be taking in 7.4 percent of China’s total retail value.

Aside from all the growth, the infographic gives a good summary of the current players [2] in the B2C e-commerce sector, which is dominated by Alibaba’s Tmall and the perhaps-soon-to-IPO 360Buy. There’s also market share info for e-payments providers in China, again dominated by an Alibaba company (Alipay), along with Tencent’s Tenpay. Here’s the full thing:

(Infographic source: Go-Globe)

For more fun graphics like this one, check out previous entries in our infographic series.

China’s biggest clothing e-commerce site has been on a bit of a bumpy road over the past few years, but this year is looking bright. The company is building an expensive and shiny new HQ in Tianjin, and is aiming for a US IPO sometime this year. But that’s not all; at a recent meeting at Vancl headquarters, CEO Chen Nian announced that the company is also aiming for 50% performance growth and total profitability this year. Yowza!

Mr. Chen admitted that the company had faced hurdles over the last year, and blamed out-of-control product and personnel expansion for the excesses that ultimately resulted in some staff and service cuts (although it seems not to have been a factor in the cancelled 2011 IPO plans). In response, the company made a number of adjustments (including apparent layoffs) that Chen says have greatly increased operating efficiency and reduced warehouse turnover from an average of more than 3 months to under 30 days.

Chen’s plans for this year are ambitious, to be sure, but he’s building on strong growth from the end of 2012, and he’s finally got a US IPO in his sights. Nothing’s written in stone, but personally, I wouldn’t bet against him.

(via Sina Tech)

2011 saw economic turmoil and financial scandals that led to only two Chinese tech companies venturing to IPO in 2012. But 2013 is looking up. This year there’s the distinct possibility of there being nine major Chinese web company IPOs, among which will be the biggest ever that China has produced.

Buoyed by the solid progress of the small class of 2012 (VIPShop and YY), these are the names to look out for in the year ahead. Inspired by a longer list on QQ Tech, we’ve pruned that down to nine realistic contenders. Some of these Chinese internet companies have been more candid than others when it comes to intent or timing, but they are, to varying extents, likely to be hitting the stock tickers in New York or Shanghai in the months to come.

1. Alibaba

Let’s start with the big daddy, Alibaba Group, which runs market-leading e-commerce sites like Tmall and the iconic Taobao. Just yesterday we wrote of how Alibaba, according to rumor, has already hired two underwriters for its public listing in Hong Kong, thought to be coming mid-2013. Alibaba could well raise US$3 billion to $4 billion at a valuation of $35 billion to $40 billion. Yahoo owns a 20 percent stake.

2. 360Buy

It’s difficult to determine which would be the second most valuable company to go public, so the rest of this list is in no particular order. Though I think 360Buy is the next largest. It’s the main rival to the afore-mentioned Tmall in China’s fiercely competitive B2C e-commerce industry. In November of last year 360Buy attracted $400 million in series D funding, which effectively values 360Buy at $7.25 billion.

2013 has long been pegged as 360Buy’s IPO year, so it’s a case of the online store balancing its ability to attract investors despite a lot of losses on the books with the need to raise a realistic amount. Last year’s reports of it raising up to $5 billion by a public listing might prove to be seriously exaggerated.

3. Sogou

Sogou is the search engine and software division of Sohu (NASDAQ:SOHU). It’s third in China’s volatile search market with 7.92 percent share of pageviews (a few percent above Google) at the end of last year.

Sogou is Sohu’s top earner and has been for 10 consecutive quarters. Sohu bought back Alibaba’s 10 percent stake in Sogou last summer. It’s now ripe for being spun off and floated.

4. Qunar

Qunar has been rumored to be working towards an IPO this year for quite some time, and the CEO of this online travel site even said in January of last year that a listing made sense as soon as “the market stabilizes.”

China’s top search engine, Baidu (NASDAQ:BIDU), invested $306 million in Qunar in the summer of 2011, thereby taking a major stake in the travel store.

5. Vancl

You’ll notice that all but one of the list so far are e-commerce companies. And here’s another. Vancl runs both an own-brand store (like GAP or Uniqlo) online, as well as the V+ open platform mall. Vancl CEO Chen Nian explained recently how its cancelled US IPO at the end of 2011 turned out to be a bullet that he very narrowly dodged. There’s an interesting anecdote about how George Soros helped out.

As with Qunar, the wait for markets to improve is surely over for Vancl.

6. UCWeb

The UCWeb listing is one of the most likely of this bunch. The makers of the hugely popular UC Browser for smartphones, which has over 400 million global users, have made it clear that 2013 is their ticket. CEO Yu Yongfu has already explained that “It would be better for us, branding-wise, to be listed in the US. It would expand our brand name and make us better known.”

7. Cloudary

A particularly likely US venturer is the Shanda (NASDAQ:SNDA) spin-off Cloudary, which is its e-book platform subsidiary. A ringing of the bell at the NYSE sometime in April is rumored to be in the cards. Shanda Cloudary – formerly dubbed Shanda Literature – recently appointed a new chairman in ‘Robert’ Qiu Wenyou, a former investment banker at Merril Lynch.

Cloudary, as we saw with Vancl, is another cancelation casualty of a grim capital market towards the end of 2011.

8. Dianping

Heading back into the realm of e-commerce again, Dianping is often called “China’s Yelp” and is also the country’s third-largest daily deals site. But Dianping has not been outwardly chasing an IPO, so this one is far from certain. Nonetheless, the deals service has matured a lot in recent years and now has a claimed 40 million mobile users, so it’s at the stage where it might be ready to go public.

Dianping raised $60 million in fourth-round funding a few months ago.

9. Xunlei

Another 2011 IPO withdrawal, Xunlei is very keen to list to raise funds for its growing video streaming site. Back then, Xunlei was aiming to raise $200 million.

Trouble is, Xunlei also has a P2P file-sharing network that’s riddled with piracy. On top of all that liability, Xunlei’s main site is over-reliant on advertising, which is an unreliable source of sustenance. Nonetheless, Xunlei is very likely to resuscitate its 2011 IPO plans pretty soon, now that 2013 is looking like a much better climate for Chinese tech stocks.

(Hat-tip to QQ Tech for the partial list of names)

The last we heard from e-commerce platform Vancl, the company was in the middle of major staff cuts, and there were also staff cuts earlier in the year. But all that cutting hasn’t stopped Vancl from being able to throw buckets of money around; the company is reportedly pouring one billion RMB ($158 million) into a shiny new HQ in Tianjin thanks to a major investment from the city’s Wuqing district government.

The headquarters will serve as Vancl’s new home base for accounting, distribution, R&D, product showcases, and customer service. It will also include a gigantic new warehouse to facilitate distribution process. The company is currently based in Beijing, and the move to this new center in Tianjin may be an attempt to save a little money by escaping Beijing’s absurdly expensive real estate prices while still maintaining a presence very close to Beijing. Wuqing district lies to the Northwest of Tianjin’s city center, making it both comparatively rural (and thus cheaper) and comparatively close to Beijing. Tianjin is also an extremely well-connected city in terms of transportation, and will likely serve Vancl well its new shipping hub.

Both parties have just signed the papers for the investment, so don’t book your tickets to Tianjin to check out Vancl’s shiny new digs just yet. But between the new HQ and Vancl’s plans for a US IPO sometime this year, 2013 is shaping up to be quite an interesting year for China’s biggest fashion e-commerce platform.

[Tianjin Daily via Sina Tech]

Chinese clothing e-tailer Vancl is reportedly cutting as much as 25 percent of its workforce ahead of an anticipated US IPO in the first or second quarter of 2013. Vancl, which manufactures its own brand of GAP-style clothes, has acknowledged the job cuts, but denies that the losses are as savage as a quarter of its personnel. It’s thought to be done in readiness for a Vancl IPO in the States as soon as market conditions are favorable, which could be as soon as next year.

Vancl CEO Chen Nian recently explained that his decision – with crucial insight from no less than George Soros – to delay the lined-up IPO plans in 2011 were absolutely right, as a late-2011 listing would have coincided with a disastrous plunge in the capital markets.

Earlier this month, Mr. Chen said:

If the capital markets are good we’ll list, and if not, we can live well on our own.

2013 would appear to be a good time. It seems that markets are once again warming to Chinese tech stocks – and Chinese firms in general – after a year-long thaw caused by a combination of the Longtop fraud scandal, suspect financial practices in general, and gloomy economic prospects around the world. Gaming community YY (NASDAQ:YY) had a successful listing last week; digital publisher Shanda Cloudary is looking to IPO in the States next year; and browser maker UCWeb is shooting for the same thing in 2013.

Vancl’s CEO has also said that it’s more important for the company to be healthy rather than to list. But there surely must come a time when the B2C e-commerce site can be declared pretty healthy – with reduced costs, and being close to turning a profit – so that it can then go out and raise funds.

[Sources: Sohu IT; Reuters China - articles in Chinese]

Vancl CEO Chen Nian

Clothing e-tailer Vancl has had a rough year and has only recently started to reemerge from its shell, with Vancl CEO Chen Nian finally weighing in on the IPO cancellation and the company’s future plans. Recently, Mr. Chen revealed that Vancl’s numbers are also looking up; at a conference in Hong Kong the CEO revealed that income from sales is up 30 percent from last year, and the company is nearing its profit goals.

It’s not all the result of sales growth, of course; earlier this year Chen cut staff and advertising in order to decrease the company’s overhead and hopefully achieve profitability within the year. Thanks in part to these measures, the company is close, although it isn’t clear exactly how close it is or whether it will actually be in the black before 2013 rolls around.

On a tangential note, the company has also released some official statistics that might interest you: Vancl has about 20 million users, who make purchases an average of 4-5 times per year, according to the company. Sixty percent of these users live in first tier cities, and they spend $24-$32 per purchase on average.

[via Sina Tech (including the image)]

When asked what happened back in 2011 that derailed Vancl’s IPO plans, Chen responded (our translation):

Today I can tell you directly that the reason we stopped in November of 2011 was because we did an evaluation of the capital market, and now you can see that our decision was the correct one.

That day when I went to Hong Kong and had dinner with Soros, he said don’t do anything between today and December 8. December 8 was the day we had chosen to list. I was furious at the time. I was thinking, had he done this on purpose?

Later we came to know that Soros had a reason for saying this. [...]

At that time, how could I believe him; I was planning all kinds of things and calling meeting after meeting. But OK, on the evening of December 8th when the markets began to drop crazily, then I believed! From that day, we stopped everything [related to the IPO plans].

If we had listed then, with the capital markets as they are now, Vancl couldn’t become healthy, I’d just be in for more scorn and ridicule.

OK, so not listing then was the right decision. But what about now? Does Vancl still see a US IPO in the cards at some point in the future? Chen Nian was cagey, but he didn’t rule out the possibility of another IPO attempt:

Today I think that as long as Vancl becomes a healthy and strong company, whether or not we list isn’t important at all. If we want to list we will, and if not, we won’t. If the capital markets are good we’ll list, and if not, we can live well on our own.

It sounds like Vancl hasn’t totally abandoned its IPO dreams, but nor is there another IPO attempt in the cards very soon. We’ve seen some grim news from the company recently, but it is also expanding into Southeast Asia and it will be interesting to see if that venture takes off.

[Forbes Chinese via Sina Tech, Image via Sina Tech]

Two weeks ago, Vancl, China’s biggest clothing specialist e-commerce site, was reportedly cutting staff. But now the Chinese media (via TechWeb) are reporting that Vancl is marching towards overseas markets – more specifically, Vietnam, with the launch of Vancl.vn.

According to Vancl’s data, Vietnam looks like a viable choice. Vancl, which makes its own-brand clothes, has had an English e-commerce site since 2010. And through that site, Vancl saw growth mainly from Southeast Asia and Russia, with Vietnam contributing eight percent of its total overseas sales, growing at 100 percent annually in the second half of 2012 compared to 2011. Talks with Vietnamese working partners went smoothly, making Vietnam an easy choice of destination for the company’s first specific country expansion.

Southeast Asian countries have been mentioned several times in recent months as the internet industry starts to mature in the region (see stats for Indonesia, Vietnam, and Thailand internet user growth below). Some might recall that a Japanese gaming company acquired a studio in Vietnam earlier this year. Cyberagent Ventures also has an office at Vietnam.

More recently, we learned that Tencent’s messaging app WeChat is doing pretty well in Southeast Asia, particularly Thailand and Indonesia. Local search leader Baidu has a research center in Singapore but unfortunately hasn’t had a smooth journey in Vietnam so far with its quiet launch of a few social sites.

It’s interesting to note that Tencent’s effort to push WeChat in Vietnam didn’t show any marks of being from Tencent or from China, which might have made the difference in escaping the kind of anti-China backlash that came Baidu’s way during the same politically tense period between China and Vietnam.

It’s safe to say that Vietnam has captured the eyes of Japanese and Chinese companies lately and we can expect more East Asian tech companies to travel down to explore Southeast Asia. I’m betting on China’s biggest e-tailers, Alibaba (with Taobao probably), to be making the move soon. There are lots more high-potential countries in Southeast Asia, including Thailand and Indonesia.

This is a trend I think, and it’s interesting to see Chinese web companies mature to the point that they feel ready to do some careful regional expansion. Fun times ahead.

That mobile spending spree will amount to RMB 11.64 billion (US$1.84 billion) in bought items in Q2 – that’s 487.9 percent higher compared to the same period in 2011. The very strong growth in Android and iOS in China will help push that forward even more, especially as nearly all of the country’s e-commerce players have very nice apps for those two mobile OSes.

So who are the main players in mobile commerce in China? Perhaps it’s no surprise that the two large online malls from e-commerce behemoth Alibaba – Taobao and Tmall – lead the way with a monstrous 75.6 percent share of mobile shopping [1]. Second is 360Buy, the B2C rival to Tmall with 6.2 percent. Those stats suggest that 360Buy is seriously underachieving in its mobile strategy, as Analysis International market share data for China’s B2C market shows that 360Buy’s share is more in the order of 15.5 percent.

The specialist e-tailers Vancl (for clothing) and Maobaobao (for handbags) stand out strongly in these m-commerce stakes:

[Source: iResearch]

A Vancl rep told Sina Tech that the company was laying off Rufengda staff and pulling that service out of second- and third-tier cities in the hopes of being able to achieve a profit by the fourth quarter of this year. But some of the employees should be able to transfer to other local delivery services without too much trouble, according to the Vancl rep.

It’s not clear whether Vancl will really be able to achieve profitability by Q4 as a result of this cut, but 2,000 employees is equivalent to more than 50 percent of Rufengda overall, so it’s clear that Vancl’s situation is pretty serious. The company has even moved a lot of its clothing production to Bangladesh to cut costs. Will there also be cuts in other areas of Vancl’s business? Rumors have been swirling all year, but the company has yet to confirm anything else.

[Via Sina Tech]

Vancl is China’s top own-brand e-commerce site, selling its own cheap yet cheerful clothing items in a manner similar to Japan’s Uniqlo. Except Vancl does it only online. Some of its clothes retail, in a promotion going on at the moment, for as little as 29 RMB – that’s $4.60. But to get prices so low, many of Vancl’s clothing items are not made in China, but in Bangladesh.

Caused by rising labor costs in China as life in the nation’s manufacturing hubs gets a lot pricier, Vancl’s deputy GM Liu Hao has said – to the Chinese blog IT Times – that the company has begun producing some of its own-brand clothes in Bangladesh since the end of last year. But Vancl is being cagey about the extent of the manufacturing move, and many Vancl T-shirts I’ve inspected do not show any country of origin. It’s not clear what percentage of the company’s fashion lines are made in the South Asian nation.

Vancl – currently China’s seventh-largest B2C e-commerce site by market share – is not alone in looking to Bangladesh. Swedish clothing retailer H&M has 25 percent of its items made in Bangladesh – and it’s a figure the company is keen to increase. On the plus side, H&M sees lower labor costs; but there are numerous challenges in the country, such as political unrest and poor infrastructure. It is thought that 80 percent of exports from Bangladesh relate to fashion and textiles.

30% Cheaper Than China

The IT Daily was told by the chairman of the Nantong Printing and Dyeing company that production costs in Bangladesh are now “30 percent lower than domestically” in China’s textiles industry. And so that’s causing a gradual shift towards more clothing items being outsourced to Bangladesh by Chinese companies themselves. At first it was just outsourcing T-shirts and shirts. But, said the same executive, the manufacturing of more and more items, like winter jackets and sweaters, will be shifted to Bangladesh by 2013 by his company and many other rivals.

Just as global manufacturing evolved away from previous hubs, such as Taiwan, it’s inevitable that rising costs will see major brands – including Chinese ones – looking to other centers of industry. So it’s not just Vancl’s move toward Bangladesh; there’s also Lenovo looking at Brazil, and Foxconn weighing up Indonesia.

[UPDATED one day later: Added in name of the Vancl source]

And so a lot of names now familiar to Chinese online consumers have expanded their market share. Tmall went up from 39.9 percent to 41.5 percent share in the time between 2011 Q4 and 2012 Q2. Huge gains, too, for Chinese web giant Tencent (HKG:0700), which is finally succeeding in its e-commerce efforts, coming from almost nowhere to grab (an albeit distant) third place with its fairly new QQ Buy site.

Lots of other specialist e-tailers have grown healthily, with Suning, Amazon (NASDAQ:AMZN), Dangdang (NYSE:DANG), Vancl, Coo8, and Yihaodian all having expanded their market share slightly. Here are the most recent stats, which we’ve taken the liberty of putting into English-language charts:

And now compare those new figures with the situation (data also from Analysis International) from six months ago:

As for the entire B2C online retailing sector in China, it grew to take in 98.84 billion RMB (US$15.65 billion) in transactions in 2012 Q2 alone, which represented growth of 21 percent from the previous quarter, and up 82 percent year-on-year.

[Sources: Analysis International @ Eguan (1) and (2) (articles in Chinese)]

360Buy's express delivery trucks are now licensed to hit the roads nationwide in China. (Image source: Eguan.cn)

We reported recently on a significant strategic shift in China’s e-commerce industry whereby a number of leading e-tailers wanted to start logistics companies so as to deliver their own products to customers. Now, China’s State Post Bureau has evaluated all their applications and it’s good news for only one of them: 360Buy. It was the only e-commerce site granted a license to expand into the courier industry, thereby dashing the hopes of Vancl, Coo8, and VIPshop.

In response to the news, 360Buy’s CEO Liu Qiangdong took to his Weibo account to say that his company’s express delivery service will launch at the end of August. It marks the end of a battle that has actually rumbled on for two whole years when the site – China’s second-largest B2C e-tailer – first applied to expand into logistics.

The strategic move being made by some of these sites reflects a desire to crackdown on the weakest link in its chain to customers, the assortment of hundreds of private and state-run courier businesses that deliver billions of dollars worth of items each year. The recently-listed VIPshop (NYSE:VIPS) claims that the company hits a successful delivery rate of just 95 percent with its current logistics partners, and that it needs to up those percentage points in whatever way it can – even if it means a phenomenally expensive shift into a new industry.

But the e-commerce market leader in China, Alibaba (with its Taobao and Tmall businesses), is sticking with the current system, and has made no sign of moving into logistics itself.

In total, the State Post Bureau approved 260 licenses for logistics companies in this initial round of audits, with all but one of them being conventional courier firms. The likes of Vancl and other hopefuls might be luckier next time.

[Source: Eguan - article in Chinese]

Earlier this month we looked into the reasons behind two of China’s top e-commerce sites opting to deliver their own merchandise, subverting the fractured private delivery system that has been in place since online shopping first emerged in China. And now two more major sites, the recently listed VIPShop (NYSE:VIPS) and the electronics e-tailer Coo8, are making the same move.

VIPShop has submitted its application to authorities for a license to run its own nationwide courier service, as confirmed by Tang Yizhi, its vice president for logistics and customer service. He also revealed that with its current express delivery partners, S.F. Express and China Post’s EMS, the company hits a successful delivery rate of just 95 percent, which it feels it needs to up a few percentage points. The only way to do that is to manage its own logistics, even though it will cost 20 to 30 percent more compared to using its partner couriers.

As for Coo8.com, which is a subsidiary of the bricks-and-mortar retailer Gome (HKG:0493), its CEO revealed the site’s plans to establish its own in-house delivery team very soon, and which will employ several hundred by the end of the year.

A courier on an e-bike does the final leg of home deliveries. Some e-commerce sites want to dismantle this old system. (Image source: Donews)

To get into the groove for this, VIPShop has already started trial operations of its own courier service in Shanghai. Tang Yizhi says that even this limited running has produced exactly the kind of results his company wants to see: a greater percentage of successful deliveries, and reduced delivery delays by at least a half-day. Of course, that will be harder to replicate nationwide, especially in cities and provinces with less developed infrastructure.

And so China’s mature and highly-competitive e-commerce industry looks set to shake-up the logistics industry in the country, no doubt to the ire of established players like S.F. Express, but also the state-owned China Post. There remains the risk that Chinese e-commerce sites could find their own express delivery services being legislated against, if the powers-that-be make the partisan decision to protect China Post and the status quo.

[Sources: Marbridge Consulting (1) and (2)]

When a Chinese consumer buys something on one of China’s very numerous B2C e-commerce sites, the item in question is whisked off by a private express delivery company, zooming the product from one city to another in a van, and than stuffed onto – usually – an electric scooter for the final to-the-door delivery. But two of China’s top e-tailers, 360Buy and Vancl, look ready to upset that system by starting up their own express delivery companies.

According to Chinese media citing industry insiders, electronics site 360Buy and fashion-oriented Vancl have applied for the necessary business licenses to enter the logistics sector and could well be granted permission to do so next month. After that, in a strategic need for speed, their own trucks, e-bikes, and deliverymen would do the final logistical leg of a purchased item’s journey. According to QQ Tech, China’s mostly online shopping focused express delivery sector was worth 1.04 billion BMB (US$163.4 million) in the first quarter of 2012 alone, and so it will blow away the 2011 full-year market value of 3.67 billion ($576.6 million). With e-commerce in China set to expand to generate 18 trillion RMB ($2.8 trillion) in revenue in 2015, there’s still room for courier companies to grow in unison.

Final leg of the journey: A courier at work. (Image source: CNbeta.com)

But in good news for the private courier sector, market leader Alibaba – which runs Taobao and Tmall – has reaffirmed its backing of its delivery partners and the ecosystem as a whole. The company renewed its partnerships with nine Chinese logistics firms last month, including the likes of SF Express, and EMS. When I heard Alibaba’s Jack Ma give a speech in his native Hangzhou last year, he spoke in depth about how competition is good for society, raising quality and lowering prices. He also singled out state-run China Post for mockery, pointing out how the new business culture brought about by e-commerce had shaken up the dinosaurs, and spurred a huge new boost in employment and business opportunities at courier companies.

360Buy and Vancl – and perhaps some other e-tailing companies who might make the same in-house delivery move – might argue that the sector, with its often ramshackle vans and duct-taped e-bikes (pictured left), is ripe for pumping in some professionalism, perhaps with companies like UPS or DHL in mind.

Of course, this business switcheroo can go two ways. Indeed, on May 31st, SF Express launched its own e-commerce site that uses its own resources to get products into customer’s hands.

And so there’s likely a battle ahead in China as the formerly complementary logistics and e-commerce sectors turn competitive on one another.

[Source: QQ Tech - article in Chinese]

E-commerce is growing fast in China, but the future may be in mobile e-commerce. That’s something experts have been saying for a while, and the latest data from online retailer Vancl certainly seems to back it up. According to data the company released yesterday, its mobile clients broke four million users in 2011, and its mobile site had more than ten million pageviews.

The company said that mobile users submitted three to four orders per year, and that their best day saw more than 50,000 orders come in via mobile devices. That’s especially impressive given that it didn’t even start promoting the mobile stuff until March of last year, so it hasn’t even had a full year to build up to these numbers.

So, yeah. If you didn’t know, now you know. Mobile e-commerce is gonna be big.

[via Sina Tech]

(Image source: Chinaluxus.com)

The CEO of 360Buy, China’s second-biggest e-commerce site, has announced that his company will create “over 25,000” new jobs next year. That public Weibo message from Liu Qiang-dong (pictured right) led to speculation that 360Buy might be about to buy its rival Vancl, which specializes in only clothing – but 360Buy representatives moved quickly to quash that rumor.

It’s not the first time we’ve heard of hiring plans at 360Buy – also known as Jingdong Mall – as the company said it would hire 20,000 new staffers for 2012 back in October of this year. So it seems Mr. Liu’s company is now even more confident and has raised that figure. It is said that 360Buy currently has 15,000 people on its payroll. Analysts, meanwhile, say the company could double its revenue in 2012.

The rumor that it might acquire Vancl was likely triggered by the latter’s weaker position recently, after missing its planned US IPO schedule – and which is thought to be delayed or cancelled for the time being – and the sudden departure of its VP, who it is rumored might soon resurface at none other than 360Buy.

The B2C e-commerce site has been one of the most aggressive on the Chinese web in the past few years, rising to surpass its older rival Dangdang (NYSE:DANG), and is now second only to Alibaba’s Tmall online store. Just last month it made a move into the luxury retail sector when it opened 360Top. And the company’s purported 25,000 new hires look set to perpetuate that growth in 2012.

[Source: Business China]

Another day, another he-said-she-said rumor fight between the nameless denizens of the internet and the CEOs that govern their favorite websites. This time, it’s Vancl on the hook, with rumors alleging the company has lost as much as 2 billion RMB ($312 million) over the past four years, and the company — of course — denying it.

The rumors come from an anonymous blog about Vancl on which a user has posted detailed financial information about the company, saying that because of mountains of “dead products” in its warehouses — products the company has made but can’t seem to sell off — Vancl has likely lost as much as 2 billion RMB. The news comes at a time when Vancl is looking particularly weak due to the loss of a high-level exec, a delayed IPO, and complaints about product quality.

Of course, “anonymous blogger” isn’t always a synonym with “credible information,” especially in China’s highly competitive online market, where companies routinely attempt to destroy each other in the press with rumors (and sometimes some truths). Needless to say, Vancl’s CEO has already said that the rumors are not true. “The internet is free and open, and anyone can write a blog.”

True enough. But industry insiders told Beijing Business Today that even though the rumors may not be true, it’s evident that Vancl does need to make some adjustments, as its real problems are already serious enough that it needed to adjust or perhaps cancel its IPO.

The specialist e-commerce site Vancl was supposed to be on course for its US IPO in December, but rumors in the industry suggest it will be either delayed or cancelled, and that its vice-president, Wu Sheng (pictured right), has left the company and could well be headed to join its largest rival, 360Buy.

Wu Sheng’s departure from Vancl is still shrouded in mystery, and it’s not clear if it is linked to a possibly scuppered IPO. Sina Tech reckons Mr. Wu will be at 360Buy as a senior VP before the end of the year. But none of the three parties involved have yet commented on the matter.

Though of no consolation to Vancl, it is thought that all major Chinese IPOs for the rest of the year are unlikely to proceed owing to the volatile stock markets and the difficulty in raising funds.

Vancl Group comprises its own-brand fashion store Vancl.com, and a more open B2C platform at Vjia.com. Both those have grown in the past year to be China’s biggest fashion-only online store, with a two percent market share of the entire B2C e-commerce sector in China midway through this year.

[Source: Sina Tech news - article in Chinese]

E-commerce company Vancl looks all set to list in the US in December, as it has already filed its IPO papers with relevant authorities. Now that we have a concrete time-frame, the next step is to see the SEC filings in a couple of weeks’ time.

Vancl Group is looking to raise US$1 billion. Serial entrepreneur Lei Jun is among its founders, and Chen Nian (pictured below) is its CEO. They’ll be under the spotlight as they push through the biggest Chinese overseas IPO since new VIE regulations were implemented this autumn, which affects foreign ownership of Chinese firms’ assets. Plus, tighetening credit sources around the world make this pretty tough timing.

Vancl was founded in 2007. It’s reportedly aiming for sales of 10 billion RMB (US$1.58 billion) this year. The group actually comprises two B2C sites: its Vancl.com own-brand fashion label, and Vjia.com (also known as V+) which is its open platform that sells numerous well-known brands of clothing, make-up, and home accessories. It’s up against strong B2C competition from the likes of Alibaba’s Tmall and Tencent’s (HKG:0700) QQ Buy site.

Vancl CEO, Chen Nian. (Image source: QQ Tech news)

Earlier this week we looked at daily deals site Lashou.com and its own SEC filing – only for us to hear two days later that it might be cancelled. It seems Lashou’s is delayed for the time being, and will not list next week (on the 14th) as planned.

So, for Vancl, the journey is not so near to completion as it appears. Our next post about this upstart e-commerce site could either be its starting prices or its cancellation woes.

[Source: QQ Tech news - article in Chinese]

Chinese serial entrepreneur Lei Jun.

After talking about his Xiaomi phone a bit earlier, Lei Jun moved on to share more of his entrepreneurial story. Lei Jun revealed that he has invested in 20 companies so far and about 17 or 18 of them have received VC funding, to a sum total of US$1 billion USD.

TechCrunch moderator Sarah Lacy double checked to see if the figure was $100 million but Lei Jun confirmed he hadn’t misspoken and that the sum is $1 billion. (There’s often confusion between Chinese and English translation when it comes to numbers.)

Lei Jun then explains that he usually invests in companies which are still incomplete and in a state of flux. He likes to work with start-ups from the very beginning and build a bond with the founders. He also shared that his angel investing input is often as high as the $1 million region, not the typical sum that an angel investor would commit to an early-stage start-up.

He says that he predicted a couple of years back that e-commerce, mobile internet, and social networking would be huge in China. And that is why Lei Jun co-founded Vancl (fashion e-commerce), UC Web (mobile browser), and YY.com (software and music downloads) – which plans to IPO in the US next year.

Lei Jun also says that UC Web has 167 million users with a 17 percent monthly growth rate.

“People say that China is copying, but lately, I’m seeing more innovative ideas here,” says Lei Jun.

Ending off, Lacy asked Lei Jun to give advice to entrepreneurs — Lei Jun says, “Do what you’re passionate in. That’s the most beautiful thing in life.”

There are reports emerging this afternoon that Chinese e-commerce site Vancl will file its US IPO prospectus in October with a view towards hitting the tickers in the fourth quarter. Vancl has two B2C sites: its Vancl.com own-brand fashion label, and Vjia.com (also known as V+) which is its open platform that sells numerous well-known clothing brands.

This is not official. Sources in the industry, as reported by Sina Tech News, say that Vancl is hoping to raise up to US$1 billion from a US offering. China International Capital, Citigroup, Credit Suisse, Goldman Sachs, and Morgan Stanley are apparently lined up to underwrite Vancl’s bid.

Vancl is rumored to have cut 5 percent of its staff this summer, but that’s not too dramatic a number, and might indicate only a bit of belt-tightening at the company. Compared to one daily deals site in China that has shed 80 percent of its staff, Vancl appears to be in fine health. Indeed, with 1.2 percent of market share of China’s entire B2C segment (shown in red in the graph below), Vancl is curently the leading fashion-specialist e-tailer in the country.

There’s immensely strong competition in China’s B2C sector, where both Alibaba (HKG:1688) and Tencent (HKG:0700) recently invited fellow online shopping sites onto their own open platforms. Vancl itself has opted to launch storefronts on both the revamped TMall.com and the soon-to-open QQ Buy.

Currently, there are no major Chinese web/tech IPOs officially lined up in the States, owing to ongoing global financial troubles, and the summer of turmoil amidst Chinese tech firms on Nasdaq and the NYSE. Two upcoming Chinese-US IPOs were cancelled recently – those of Shanda’s Cloudary, and Xunlei.

Nonetheless, daily deals site Lashou, and books and 3C e-commerce site 360Buy (shown in green in the graph above) are rumored to be lining up for their own IPOs in 2012. Vancl, it seems, could beat them to the tickers.

[Source: Sina Tech news - article in Chinese]

A promo on the TMall website today for its 38 e-commerce tie-ups.

As expected, Alibaba today announced a major series of B2C site partnerships for its brand-oriented online storefront known as TMall. It makes partners out of 38 rival Chinese specialist e-commerce sites, such as RedBaby, fashion e-tailer Vancl, and the WalMart-backed YiHaoDian. The site, and logo, has also had a slight refresh to coincide with this.

As with a regular mall, Alibaba’s aim seems to be to gather a very wide variety of brands and outlets on its site, to make it a one-stop solution for shoppers. The 38 sites in this strategic co-operation will get flagship stores on TMall, and thereby a chance to be part of a projected 200 billion RMB (US$31.3 billion) in sold merchandise volume in 2012. Jack Ma recently stated he’s aiming for 1 trillion RMB in transactions from both Taobao and TMall in 2012.

TMall.com is distinct from Taobao.com, the C2C site where the company first began its consumer-oriented business. As such, TMall has tens of thousands of brands on its site, many in flagship stores. One of the most grand is the official Lamborghini online dealership, where you can buy your own Italian supercar. Right now, TMall claims 48.5 percent of the Chinese B2C sector.

Major rival Tencent, whose own Paipai.com site is not jumping on-board this, is setting up a similar B2C platform that will likely launch in October, with rumored tie-ups with OKBuy and others.

There’s a grand launch page in Chinese over on TMall – but be warned that there’s auto-playing video and music.

Engagdet goes hands-on with the Xiaomi phone at its launch event.

After some tantalizing tasters last month, Xiaomi’s Android-powered phone launched yesterday at an event in Beijing. Xiaomi CEO Lei Jun took to the stage and wowed the crowd with China’s first-ever 1.5 GHz dual-core smartphone.

The Xiaomi team – best known previously for its work on the gorgeous-looking MIUI ROM for Android – managed to hit the lowest price-tag expectation, promising to sell the phone for 1,999 RMB (US$313) when it goes up for order on August 29th. Shipping begins sometime in October.

At 1,999 RMB it’ll significantly undercut HTC’s Weibo-oriented Weike phone, and it’ll be the exact same price as Motorola’s brand new China-first XT531, which has better-looking but less powerful hardware.

Some novel price savings will be made by avoiding the usual bricks-and-mortar retail channels, and selling the device on B2C e-commerce sites such as Vancl.

The Android-powered phone will effectively run the MIUI interface that Xiaomi has worked on for so long, and made available for free to Android customizers. Some regard it as the best-looking Android interface mod that has ever been made. Others, however, dismiss it as a tiresome attempt to ape Apple’s iOS.

Engadget’s China editor Richard Lai went hands-on with an early prototype of the phone, including a video, right after the event, and reported that the Xiaomi smartphone felt “a bit like the HTC Sensation but smaller.”

Xiaomi’s timing is not too hot, though. Most Chinese gadget geeks know that the iPhone 5 will be announced in the next month or two, and they’ll likely be able to get their hands on one before the Xiaomi phone even ships. There are other challenges facing the device…

Ambitions to rival HTC, Apple?

Xiaomi CEO Lei Jun channels his inner Steve Jobs. Image source: Xiaomi's BBS.

Hardware itself is not totemic to a brand; just having your logo on a device will not elevate your name. It’s worth remembering that before HTC’s rise to selling 12.1 million smartphones in Q2 2011, it labored for years as a no-name OEM, making handsets such as the Palm Treo Pro.

If Xiaomi has a long-term future, there’s a long path ahead. Remember Meizu? You know, the company that made an iPhone clone and then got lawyer-whacked by Apple? Yeah, those guys. Funny story: making a phone is easy, but building a brand that people want to buy and be a part of is infinitely more challenging than putting all the bits together in the right place.

Indeed, there are those who’ll say that building a phone in this way might be detrimental to a brand. Some in China will see the new phone as too cheap, and perhaps dismiss Xiaomi’s superphone as a shanzhai effort that wouldn’t look very impressive when ostentatiously placed on the table at a coffee shop, next to the keys to your Audi.

There’s also a legal danger this year in wading into Android, with a tide of litigation hitting Samsung and HTC. Taiwan’s HTC is facing a costly showdown with Apple over user interface and gesture elements in Android which Apple claims infringe on its own copyrights.

Having said all that, we wish the Xiaomi good luck – we like the way they embrace the (fairly) open nature of Android, and improve it visually and practically. It’s just that these are choppy waters, and China’s middle-income smartphone buyers are more concerned with brand-power than dual-core power.

[News source: Engadget; Image sources: Engadget (main photo) and Xiaomi’s BBS (lower photo)]

In this list of 5 hot, upcoming and fast-growing Chinese B2C online stores, all but one of them caters specifically to women, either for purchasing for themselves or their children. I’m sure you’ll spot the odd-one-out, so to speak.

It’s not that women don’t buy a lot of other products online, from a variety of different e-commerce sites, or that men only buy gadgets or something. Rather, the story is essentially that: (A) selling consumables – of which women are often in charge of purchasing – brings, by definition, a lot of repeat page-views and return purchases; (B) women are perhaps more loyal to a site if they get good service, and, (C) a good way to build your e-commerce brand is by specializing in one online retailing market, and doing it well.

As I saw last week, when looking at customer loyalty to Chinese e-commerce sites, areas of specialization and necessary repeat purchases can be golden. Here are 5 specialist sites (in no particular order) in China, that show how it helps to have one area of expertise…

1. Gdian.com hits the spot

Nonetheless, the site is a shining light in how to turn something difficult into a nice business opportunity, taking away the potential embarrassment of buying from C2C sources on Taobao, and wrapping it in a more professional package.

2. Redbaby.com.cn crying for attention

A major threat to Redbaby is Taobao’s branded TMalls, which gives all kind of brands – including those retailing baby milk formula, infant’s clothing, etc – a direct online storefront for parents.

3. iHush.com making a noise

4. M18.com stepping out in style

5. Vancl.com making its own way

Sales of clothes at Vancl were up 300% in 2010 (from the previous year), and daily sales revenue is believed to be in excess of RMB 10 million per day (see the FT’s Beyond Brics blog for the stats). The numbers for 2011 look set to be even better – just in time for their planned US$1 billion IPO.

Vancl’s ecommerce scope might be smaller, and their approach very different to Taobao.com, but the firm is finding that the clothing sector (minus the costly bricks-and-mortar stores) is yielding high profit margins. That’s in contrast to rival site Dangdang.com, which is not being able to get much of a margin from their (very controversially) heavily-discounted books.

Vancl vs. Taobao
How do the sites differ? Well, Taobao.com started as a purely consumer-to-consumer site, selling anything and everything, sort of like a ginormous eBay – but, in the past two years, Taobao has matured into a more sophisticated platform, adding brand-oriented T-Malls – where you could even buy a Lamborghini supercar, direct from the Italian automaker itself – into the mix. These T-Malls (well, the ones that sell clothes) are in direct competition with Vancl, and it’s where Vancl is hoping to erode Taobao’s profits and progress.

To add more spice to the hotpot, Vancl is also in the midst of a massive ad campaign across China’s larger and wealthier – aka: tier 1 – cities, and is also focusing on the kind of customer service and attention to detail that can’t be offered by Taobao’s rag-tag army of millions of C2C sellers.