360Buy Looks Around to Real Estate 京东商城试水房地产

By newsdoug on April 13, 2012

I have no idea what’s happening behind the scenes at 360Buy, but a growing number of mixed signals from this online retailing giant seem to portray a company sinking into turmoil, including the latest news that it is now getting into the real estate services business. (English article) According to the latest reports, 360Buy, which also goes by the name of Jingdong Mall, has teamed up with a Beijing real estate company called Tianheng as a potential prelude to entering the online home shopping business. While homes are also a consumer retail product, selling such major items online is far different from 360Buy’s core retail business of selling everyday products like electronics, clothing and books. What’s more, 360Buy has no experience in this kind of transaction, which is far more complex than buying a tube of toothpaste over the Internet. This new initiative is just the latest sign of a company that is losing focus as big new investors who pumped more than $1 billion into it last year seem to be looking for any and every new business opportunity they can think of. The company entered the highly competitive online book selling business in January (previous post), and in February it made a strange move into the online travel business, putting it into direct competition with well established players like Ctrip (Nasdaq: CTRP) and eLong (Nasdaq: LONG). (previous post) The steady stream of new initiatives comes not long after the investor group that included Russia’s Digital Sky Technologies made the $1 billion-plus investment about a year ago, leading me to believe this group is at least partly behind these moves as its members anxiously look to justify their huge investment. Amid the stream of new business initiatives, increasing signs have emerged of a behind-the-scenes battle over the timing of an initial public offering by the company. 360Buy’s founder Liu Qiangdong has repeatedly said that no such offering is in the works for at least the next 2 years. But at the same time, another steady stream of reports that appear to be coming from the banking world keep emerging that say the company has hired an investment bank as it prepares to make a multibillion-dollar IPO. (previous post) The increasingly mixed signals look like a worrisome trend for potential investors, indicating this company is rapidly losing direction and focus as a number of major stakeholders all try to take control. Presumably the company still has lots of cash and doesn’t urgently need to raise money through an IPO after its big fund raising last year. Still, if it does go ahead with a public offering, I would caution investors to be very wary of buying into this company until it can regain some of its focus and concentrate on becoming profitable.

Bottom line: 360Buy’s move into real estate services is the latest mixed signal from the company, which appears to be losing focus as stakeholders and managers battle for control.

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