Vancl to delay its IPO until late 2012
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China's biggest online clothing retailer, Vancl.com, will not consider an initial public offering until the second half of 2012 at the earliest because it wants to focus on growing revenue first, its chief executive said.
The company also aims for sales to rise fivefold to about 10 billion yuan ($1.5 billion) this year, Chief Executive Officer, Chen Nian, said in an interview on Monday.
"Our last round of fundraising was about four months ago. That's when our investors assessed us at about $5 billion," Chen said.
Vancl.com, which sells clothes, accessories and home furnishings on its website, said it had been valued by private equity investors at about $5 billion. It counts private equity companies and venture capitalists IDG Capital Partners, SAIF Partners and Qiming Venture Partners among its investors.
"I thought about going public last year, but I changed my mind after three months because I want to focus on growing my sales numbers," Chen said.
"The initial public offering may come in the second half of 2012 or the first half of 2013, but if the sales numbers are better than expected, then I may not go public then. Even Facebook.com isn't public yet."
Before setting up Vancl.com, Chen was one of the founders of Joyo.cn, a Chinese consumer website that was later bought out by Amazon.com for $75 million.
China has the world's biggest Internet market by number of users, and the research company Forrester Research estimates that total web sales are likely to triple to almost $160 billion in 2015 from about $50 billion in 2010.
The optimism surrounding the growth potential of the Web in China has pushed up the share prices of many Chinese Internet companies, including Youku.Com and the recently listed bookseller Dangdang.com.
The valuations on Chinese Internet companies have risen to their highest levels in more than a decade, helped by sufficient liquidity and general growth prospects, research company ChinaVenture said, and the sector is in danger of seeing a bubble forming.
Chen dismissed talk of a possible repeat of the dotcom crash in China, saying that the current wave of fundraising and new Internet companies were being driven by real consumer demand for Web services.
"The difference is that with websites such as Vancl.com, users actually have to fork out some money to pay for products, and it's not just measuring clicks," Chen said.
"If you say it's a bubble, it's either because you're not a well-run company, or it's because you're a venture capitalist who can't afford to enter the market and so you complain about the high cost of entry."
