Jingdong Unifies Name In IPO Run-Up
It may seem like a minor thing, but Jingdong Mall’s new decision to formally change its web address is one of the most welcome pieces of news that I’ve seen in China’s e-commerce space in quite a while. I realize that of course I’m exaggerating a little, but the latest decision from Jingdong does seem relatively significant because it demonstrates the company is trying to create a unified and consistent image for consumers and investors as it gears up for a large IPO likely to come later this year in New York.Many readers may be unfamiliar with the Jingdong name, because the company is often referred to in both western and Chinese media by its original web address of 360Buy.com. But its formal name has always been Jingdong, and the company even made a minor attempt to boost public awareness of that title when it launched a brief IPO attempt last year that later got aborted due to abysmal investor sentiment. (previous post)
So against that backdrop, I was quite excited to read in the latest headlines that Jingdong is formally moving its 360Buy site to the new web address of JD.com, which is a shortened version of the Jingdong name. (English article) People who click on the old 360Buy.com address are automatically re-directed to the new JD.com site, which includes a jazzy pop-up display that highlights all the things that the “JD” moniker stands for in Chinese.
Under the new re-branding campaign, Jingdong has also dropped the word “Mall” from its English name, leading some media reports to speculate the company may plan to eventually diversify beyond its original role as an online seller. That’s not hard to believe, since this ambitious company has already entered a wide array of businesses outside its original e-commerce area, including online real estate and travel services.
From a writer’s perspective, I’m quite relieved that I’ll no longer need to write “also known as 360Buy” in my commentaries on Jingdong, as the 360 name looks set to be permanently retired. A similar naming strategy was previously followed by e-commerce leader Alibaba, which renamed its popular B2C e-commerce platform about a year ago under the Chinese name Tianmao, or TMall in English. In that case Alibaba made the move to differentiate the site from its other C2C business that had a similar name.
Such attempts to create specific brands around individual products and services are important because they eliminate confusion in consumers’ minds. That makes it easier to market and promote products by giving them their own unique and constant brand names. Of course writers like myself also like this kind of approach because we don’t need to constantly explain to readers why one name can refer to several different products, or conversely why several different names can refer to a single product.
This lengthy discussion of Jingdong’s new name strategy leads me to my bigger point, which is that this somewhat cosmetic move looks like another important step as the company prepares to make an IPO that could raise $1 billion or more. It’s important to have a unified brand when you’re trying to sell such a massive offering to investors. Such a strategy not only eliminates confusion, but also shows that a company has a focused development strategy. After all, investors who read about Jingdong Mall in one report and 360Buy in another are likely to not only become confused, but also to wonder why such a big company has 2 such completely different names.
Jingdong is now a solid number-two in China’s e-commerce space, behind only Alibaba. Its investors include Russia’s Digital Sky Technologies and a wide range of other domestic and foreign players, many of whom are eager to get some returns on their investment and are pushing the company to make an IPO sooner rather than later. Jingdong itself has indicated it expects to turn profitable this year, which hints that an IPO could come around the same time. If all goes according to plan, this latest name change and other recent signals indicate we could see Jingdong make a new attempt at a New York IPO as soon as the fall, with the company likely to get a market valuation in the $6-$8 billion range.
Bottom line: Jingdong’s new name strategy is the latest signal that its planned IPO is on track and could come as early as September.
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