Vancl.com, Awaiting its IPO, Aims to Crumble Taobao’s E-Commerce Empire

Vancl, the Chinese online clothing brand and retailer, which plans to IPO in early 2012, is aiming to take big chunks out of Taobao.com’s e-commerce empire. Whilst Taobao is still China’s online general marketplace, Vancl’s own brand of clothes is doing very well on its B2C site, Vancl.com.

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.