Another Suning E-Commerce Acquisition Rumored to be a Done Deal

Chinese electronics retailer Suning (SHE:002024), which is currently expanding its e-commerce offerings very aggressively, is rumored to be in the final stages of acquiring yet another struggling e-tailer. Just a few weeks after Suning snapped up infant clothing site Redbaby, it is now rumored to be very close to buying out Masamaso.com, which makes and sells its own brands of clothing.

It is believed that the acquisition talks are close to being wrapped up, according to sources talking to Donews. Masamaso executives and its key investors – including Sequoia Capital and Northern Light Ventures – are apparently ready to announce a deal soon. How soon? If it’s going ahead, then the buy-out will be revealed ahead of Singles’ Day sales promotions on November 11 – an important time for nearly all Chinese e-commerce sites to reach out to potential new customers.

Masamaso – which makes it own brands of mid-range men’s and women’s clothing – brought in a self-reported RMB 500 million (US$79.55 million) in sales in 2011. But it’s not clear how much of a profit was made on that – or, this being China’s fierce B2C sector, how much of a loss. Masamaso is aiming to double its sales revenue for 2012, but the site has long since reported to be in financial trouble, closing its experimental flagship physical store in Beijing earlier this year.

Rumors of Suning looking into acquiring Masamaso actually go back to July of this year – when it was also believed that the company was trying to buy Redbaby, which turned out to be true. Masamaso and Redbaby are similar in that they manufacture much of their own clothing lines.

Suning might be best known among Chinese consumers for its 1,300+ brick-and-mortar electronics stores, but the Nanjing-based company has been pushing hard into e-commerce in the past year or so, seeing its B2C e-commerce market share grow as its Suning.com site saw a 130 percent rise in sales from 2011 H1 to 2012 H1. It’s also diversifying its product verticals for its online retailing efforts.

[Source: Donews (article in Chinese); via Marbridge]