eCommerce is huge in China

DangDang the largest Chinese online book retailer, will be going public in Nasdaq. As one of the first major Chinese ecommerce sites going public, it will create a lot of noise especially today when China “ecom” business is booming.

It’s rumor that Dangdang will have a valuation of about US$ 1 billion base on about only US$ 5 million in profit last year, it provides a PE of 200 times. Growth of the company’s core business ( selling books ) is slowing down. DangDang have a new business line - which sells everything from electronics to linens, slipper, home decor, milk powder, etc … This new line grows fast with over 230% last year tho’ currently only account for a small portion of the company revenues.
The brand name DangDang is famed for books in China as with its main rival JOYO ( Amazon’s China Subsidiary ).

Apart from Taobao which we could say resembles a huge shopping mall online whom have everything from A-Z from thousands of sellers the ecommerce industry is moving “vertical” specifically targeting a specific segment or niche’. Such companies in China - for electronics, 360Buy, for milk powder and other baby products Red Baby tho’ a host of many others baby sites are mushrooming including a friend of mine whom had just paid a hefty 1 million for the domain Baby.com.cn to launch his ecommerce baby line after acquiring more than 100+ baby stores across China. And for garments products there is Vancl whom I had to mention since their advertisements had been popping up on my screen daily every time I start my MSN. And there is Moonbasa and Rutisher too for clothing whom is VC backed today and is doing extremely good. Not forgetting Gilt.com Chinese version – VipShop and VipShangpin is fast shaping its business in China.

360Buy IPO is also in the pipeline and the company business is growing leaps and bounce so we be expecting another huge ecommerce IPO soon around the corner.

According to industry insider online book stores has gross profit margin of about 5-10%. Electronics : 3-5%. Garments : 20-50%. But eventually as predicted every ecommerce site that goes IPO will be opening up to sell almost everything to tap onto more categories to expand their market share and to increase revenues.

*NOTE : Had always wanted to be in this business but never had the chance or opportunity. Who knows maybe one day I will.