A Chinese multichannel furniture retailer plans an IPO
July 8, 2015 04:30 PM
Guangzhou Shangpin Home Collection Co. Ltd., a Chinese customized-furniture maker and cross-channel retailer announced that it plans to raise 2.5 billion yuan ($402 million) through an initial public offering on China’s version Nasdaq, the Growth Enterprise Market of Shenzhen Stock Exchange.
Shangpin Home Collection ranks No. 42 in the Internet Retailer China 500, with 2014 web sales of $299.8 million in 2014, an increase of 50% from the prior year, according to Internet Retailer’s estimates.
Founded in 2004, Shangpin Home Collection plans to use most of the funds raised through the stock sale to upgrade its systems for manufacturing customized products and investing in its website and fulfillment centers.
Shangpin Home Collection says its revenue grew 63% from 1.175 billion yuan ($189 million) in 2013 to 1.912 billion yuan ($308 million) in 2014. The company does not disclose how much it sells online versus in its stories. It does note, however, that it generated 13.79 million yuan ($2.22 million) from referring online shoppers to franchisee-owned Shangpin stores, a 242% increase from 2013.
The Guangzhou-based company sells furniture including kitchens cabinet and sofas, via its physical stores, its e-commerce site Homekoo.com and web stores on popular Chinese online marketplaces, such as Alibaba Group’s Tmall.com and JD.com, No. 1 in the Internet Retailer 2015 China 500 Guide. Alibaba, whose online marketplaces account for roughly 80% of online retail sales in China, is not ranked in the China 500 because it is not the merchant of record for sales conducted on its marketplaces, but rather provides a platform where other merchants can sell.
While bricks-and-mortar stores account for most of Shangpin’s sales, its website plays a role in driving traffic to stores, a spokeswoman says. “Shoppers normally start to know our products online and they often create their personalized products through our online channel,” she says. “They can choose different styles, sizes or materials for products and see the 3-D effects on our site Homekoo.com. Some of them want to see samples of the products, and they can go to our stores before they place the orders.”
Shangpin Home Collection also provides free design services on Homekoo.com, and it says it has designed more than 3 million homes for consumers.
Shangpin operates a factory covering about 27 acres and manages a total of 969 stores, including 901 franchise stores and 68 stores that it operates itself.