initial public offerings (IPOs) trading on American exchanges

Friday, February 14, 2014

China's online retail giant JD.com aims for U.S. IPO

For American investors eager to buy into the rise of the Chinese consumer, today brought some news of interest: JD.com, a Chinese online retailer, plans to raise $1.5 billion in a U.S. initial public offering, according to a filing with the Securities and Exchange Commission.

The company describes itself as China’s largest online direct sales company based on transaction volume. JD.com doesn't just put customers together with merchants via the Internet; it procures its own inventories, sells the products directly to consumers online, and provides delivery and after-sales service.

The numbers, as is so often the case with things in China, are big. In the first nine months of last year, the company counted 35.8 million active customers and fulfilled 211.7 million orders through a delivery staff of 18,005 people, pulling in 49.2 billion yuan ($8.12 billion) in the same period, according to the filing.

The company says customers have generated 247 million product reviews, and the company’s technology platform has the capacity to process up to 30 million orders a day. And there’s a lot of room to grow, according to the prospectus: China’s online retail market may reach 3.6 trillion yuan by transaction volume in 2016, based on estimates from iResearch, a consulting company that measures China’s Internet industry.

The IPO would be the largest in the U.S. by a Chinese Internet company, according to data compiled by Bloomberg News. Would-be investors in the U.S. can join the likes of Prince Alwaleed Bin Talal, the founder of Kingdom Holding (and worth $32 billion himself, according to the Bloomberg Billionaires Index) as well as Tiger Global Management.

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