CHINA'S E-COMMERCE FIRMS GOT USD1BN IN VC IN 2010

AsiaInfo Services
01-21-2011
China's E-commerce Firms Got USD1bn in VC in 2010

SHANGHAI, Jan 21, 2011 (SinoCast Daily Business Beat via COMTEX) -- E-commerce firms in China raised more than USD 1 billion in venture capital (VC) in their fundraising in the entire 2010, according to a report from Analysys International.

That, said the Beijing-based company, includes USD 614 million that e-commerce firms seured in the fundraising by December 13, 2010 as well as a USD 500 million 360buy.com, an online 3C (communication, computer and consumer electronics) products retailer, released on December 23, 2010.

Of all the capital raised by the e-commerce players by December 13, 2010, 16% went to group purchase discount platforms and the remainder 84% went to business-to-consumer (B2C) platforms.

Such a VC frenzy indicates that e-commerce firms are confronted with smaller capital pressure at the moment, pointed out market observers. China's B2C platforms lured a total of USD 604 million from 2006 to 2009.

China is expected to see a 30% annual compound growth rate in the e-commerce market in the next five years, predicted Goldman Sachs Gao Hua, a Goldman Sachs joint venture, noting that the country's e-commerce market is likely to touch USD 300 billion in 2015.

The debut of E-commerce China Dangdang Inc. (NYSE: DANG) and Mecox Lane Ltd. (Nasdaq: MCOX) on the Nasdaq spurred VC firms' appetite for a 457 million-shopper market, said a market observer.

Mecox Lane, based in Shanghai, is one of the an online clothing and accessories retailers in the country.

China Dangdang, operator of the renowned online product retail platform Dangdang.com, opened 53% higher at USD 24.5 apiece and expanded by 86.94% in its debut trading on December 8, chasing Youku.com Inc. (NYSE: YOKU), an online video-sharing site listed in New York with China Dangdang on the same day.

Competition in the e-commerce market will intensify in 2011, giving force to cash-abundant players while squeezing smaller players, said the China e-Business Research Center in a report.

Letao.com, one of the fast-growing online footwear retailers in China, is about to kick off a new round of fundraising, disclosed people familiar with the matter at the end of 2010.

Letao.com is in talks with venture capital firms for fundraising in which more than CNY 200 million will be secured, said an executive for the company. Included in the potential investor list are some renowned venture capital firms in the country, according to people from venture capital firms, noting that the talks are confidential.

Source: www.nf.nfdaily.cn (January 21, 2011)

KEYWORD: SHANGHAI INDUSTRY KEYWORD: Internet & Online Services & Media SUBJECT CODE: Internet & Online Services
E-commerce
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SinoCast China IT Watch
B2C
e-commerce
fundraising
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