VIPShop: China’s First Profitable B2C Website

Vipshop in NYSE

Vipshop.com, which is not well known in China’s e-commerce field, got the public’s attention because its stock price shockingly soared 10 times more than last year. What’s the secret?

Vipshop achievement was very amazing, up to now, it had generated profits three quarters in a row. Other B2C players like JD.com and Dangdang are still struggling to break even and make a profit.

In some Vipshop executives’ view, the fastly rising stock price came from the investors who gradually recognized Vipshop’s value. In the past three quarters, the Non-Gaap net income was USD 640,000.

According to the Q2 finance report released on Aug 15 2013, VIPShop’s total revenue reached USD 351.3 million, with a 159.7% YoY increase. Its net income grew to USD 9 million, while last year the net loss was USD 5.8 million. Vipshop became China’s first profitable B2C e-commerce enterprise.

Jingdong former assistant president Liu Shuang said, Vipshop was really different from the other e-commerce companies. It focused on the leftover products. For some apparel brands, Tmall.com may contact the company’s e-commerce department or the marketing department, but Vipshop would contact the brand’s clearance department.

After seeing Vipshop’s success, many e-commerce companies plan to enter the flash market. Tmall, Dangdang, Jingdong, Yihaodian…Today, they all have flash sales business, trying to compete with the market leader Vipshop.

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