VIP Shop Soars Past Dangdang 唯品会市值超当当网
After an IPO earlier this year that was a major flop, discount e-commerce company Vipshop‘s (NYSE: VIPS) have quietly jumped in the last few months despite many obstacle it has faced this year. This otherwise low-key company, which has been out of the headlines since its disastrous IPO in March, caught my attention after I read a report saying its market cap has passed that of Dangdang (NYSE: DANG), previously China’s largest publicly listed e-commerce firm. (Chinese article)
Vipshop’s current market cap has risen steadily in the last few months to reach nearly $400 million, as Dangdang’s has moved in the opposite direction and is now at around $350 million.
The move marks a big turnaround for Vipshop, which is the only major Chinese web company to make a US listing this year due to a chilly investor climate. Vipshop’s shares initially sold for $6.50 each and fell to almost $4 afterwards, but have come roaring back recently and now trade at around $8. The company is also inching towards profitability, unlike Dangdang, which is sinking further into the red due to cutthroat competition in the general merchandise e-commerce space.
Perhaps Vipshop’s key to success lies in its relatively niche focus in the bargain shopping space, which helps protect it somewhat from the rampant competition in the more mainstream e-commerce market. Regardless of the reason, this company and other niche retailers certainly seems like ones to watch as the cutthroat competition in the more mainstream e-commerce space is likely to continue through the end of this year and well into 2013.
Bottom line: Vipshop could be an e-commerce company to watch due to its niche focus.
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