The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — JD.com Inc., the Chinese online retailer whose business model is similar to Amazon.com Inc.'s, raised $1.78 billion in its U.S. initial public offering after pricing the shares above the marketed range.
JD.com priced 93.7 million American depositary receipts for $19 each, according to data compiled by Bloomberg, after offering them for $16 to $18 apiece. Concurrent with the offering, Beijing-based JD.com is selling Tencent Holdings Ltd., Asia’s largest Internet company, shares valued at $1.3 billion.
The offering is the largest ever of a Chinese Internet company listing in New York, according to data compiled by Bloomberg. Investors are seeking to capitalize on growth in China, where revenue from e-commerce will increase 64 percent this year, compared with 12 percent in the U.S., according to projections by digital researcher EMarketer Inc.
Larger rival Alibaba Group Holding Ltd. filed to go public this month in the U.S., for an IPO expected in 2014. JD.com and Alibaba offer different business models: JD.com uses an online- direct sales system handling much of its own e-commerce logistics, and Alibaba provides the platform that brings buyers and sellers together.
ADVERTISEMENT
At the offering price, JD.com’s market value is $26 billion, according to data compiled by Bloomberg. On a price-to- sales basis, JD.com is receiving a multiple of 2.3 times last year’s sales of $11.5 billion, the data show. That’s a premium to Amazon’s 1.9 times. JD.com hasn’t yet posted an annual profit.
Following the pricing, founder and Chief Executive Officer Richard Qiangdong Liu, 41, becomes a billionaire, with a net worth of more than $3 billion. Liu will hold 84 percent of voting power after the offering, according to JD.com’s prospectus.
Bank of America Corp. and UBS AG managed JD.com’s offering. The shares, listed on the Nasdaq Stock Market under the symbol JD, will start trading tomorrow.
By Leslie Picker; Editors: Mohammed Hadi, Elizabeth Wollman, John Lear
It’s been a tough year for luxury e-commerce — but a crop of smaller marketplaces are beating the odds with a focus on emerging accessible luxury brands and a firmer grip on operating costs.
The nature of livestream transactions makes it hard to identify and weed out counterfeits and fakes despite growth of new technologies aimed at detecting infringement.
The extraordinary expectations placed on the technology have set it up for the inevitable comedown. But that’s when the real work of seeing whether it can be truly transformative begins.
Successful social media acquisitions require keeping both talent and technology in place. Neither is likely to happen in a deal for the Chinese app, writes Dave Lee.