China’s LightInTheBox Files for $86 Million US IPO to Expand its E-Commerce Business

If you want to source goods from China, there are other choices beyond Alibaba/AliExpress. One of these is Beijing-based LightInTheBox, which has just filed with the SEC for a $86.25 million IPO on the New York Stock Exchange.

Hoping to soon hit Wall Street tickers as NYSE:LITB, LightInTheBox’s F1 filing points out how it ships items from Chinese suppliers – anything from wedding dresses to China-brand smartphones and tablets – to customers in over 200 countries. The key stats:

We have grown significantly since we commenced our operations. Our net revenues grew from $6.3 million in 2008 to $200.0 million in 2012. The number of our customers increased from approximately 36,000 in 2008 to approximately 2.5 million in 2012. We experienced a net loss of $3.0 million, $4.8 million, $21.9 million, $24.5 million and $4.2 million in 2008, 2009, 2010, 2011, and 2012, respectively. We also used cash in operating activities of $2.1 million, $2.3 million, $19.9 million and $14.1 million in 2008, 2009, 2010 and 2011, respectively. We generated $7.4 million in cash from operating activities in 2012.

LightInTheBox – previously invested in by Zhenfund – has assigned Credit Suisse, Stifel, Pacific Crest Securities, and Oppenheimer and Co as its underwriters. It’ll be the first Chinese tech IPO since the largely positive listing of gaming platform YY (NASDAQ:YY) in November. With Chinese authorities having been busy cleaning up the accounting practices of local firms after last summer’s scandal over the ‘Big Four’ auditors, there’s likely a backlog of Chinese companies keen to go public. That could dampen their reception in the months to come and exhaust the capital markets, so LightInTheBox could benefit from being first out of the gate this year.

As with any B2B2B e-commerce platform, one of the biggest problems for LightInTheBox is preventing fraud by unscrupulous suppliers. That can be a costly and labor-intensive exercise. Indeed, the company routes all packages via its ‘International Distribution Center’ for quality control checks. In contrast, Alibaba.com is aiming to perform factory checks at all suppliers. The SEC filing further points out that LightInTheBox plans “to expand our warehouses and distribution network,” and that it’s absolutely critical to its survival.

This is an increasingly crowded sector. Aside from old rival DHGate, the consumer-oriented JingDong (formerly branded 360Buy) launched its international site last October with an emphasis on things that individuals or small business might want to source from Chinese factories – such as wedding dresses and gadget accessories.