B2C website 360buy.com gets fund injection
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360buy.com, China's biggest business-to-customer (B2C) website, says it has received more than $500 million in a new round of funding and it expects up to 26 billion yuan ($3.9 billion) in sales next year.
Richard Liu, 360buy.com's chairman and chief executive officer, said six strategic investors, including the US-based retailer Wal-Mart Stores, Inc, have agreed to invest more than $500 million in the company. He declined to give further financial details.
"The sum is already two times larger than was raised by either Mecox Lane Ltd or Dangdang Inc in initial public offerings in early December," Liu said in a media briefing.
Previously, the company received two rounds of funding of $180 million from venture capital firms such as Capital Today Co and Tiger Global Management LLC.
Established in 2004, the Beijing-based company has seen an annual growth rate of more than 200 percent and expects revenue of 10.4 billion yuan this year. It had 4 billion yuan in revenue in 2009 and Liu estimated sales will reach 24 billion to 26 billion yuan in 2011.
The company, which has more than 15 million registered users, sells more than 300,000 products and processes over 120,000 orders a day.
According to the domestic research firm iResearch Group, 360buy.com grabbed the biggest share of China's B2C market in the third quarter, at 35.6 percent, followed by Dangdang and Joyo.com, with 8.9 percent apiece.
Competition among major Chinese B2C companies has become increasingly fierce, as many try to outmaneuver rivals to seize their market share, analysts say.
NYSE-listed Dangdang first came to the public's attention as an online bookseller. But in 2008 it partially shifted its focus to general merchandise and electronic appliances.
360buy.com, which previously focused on 3C - computer, communication and consumer electronics - now wants to become a dominant player in other branches. In addition to general merchandise, it started selling books on Nov 1 and on Thursday it launched an online group-buying channel.
Its move challenged Dangdang, which has been an online bookseller for more than 11 years and has long held more than 50 percent of China's online book retailing market. Dangdang fought back, spending 40 million yuan on promoting books and electronic products from Dec 16.
However, Liu's company set aside 80 million yuan for book promotion on the same day. In his micro blog, Liu also criticized Dangdang Co-President Li Guoqing for asking book publishers to boycott 360buy.com.
"B2C companies will embrace a booming market in the future," said Michael Ruan, co-president of the research firm iResearch. He pointed out that although consumer-to-consumer (C2C) companies boast larger sales than B2C firms, the Chinese B2C industry is growing strongly and may overtake the C2C industry in a few years.
In the third quarter, C2C was an 110.5 billion yuan industry in China, while the B2C industry reached 15.5 billion yuan during that period. The market growth rate, however, showed the opposite; B2C boasted a month-on-month growth rate of 33.3 percent and C2C 12.1 percent.
