Chinese e-commerce firm targeted by Walmart investment
31 December 2010 - 10:16 by Paul Tissington
US retail giant Walmart, which owns Asda in the UK, is allegedly looking to buy a chunk of Chinese e-commerce firm 360buy.com, in a deal that could be worth half a billion dollars, or around £322 million.
A Chinese newspaper has reported that the website, which is the fastest growing outlet to provide safe shopping online to the world's most populous nation, has attracted the attention of international investors and although Walmart has not confirmed its involvement, the CEO of 360buy has gone on the record and officially ratified this information.
The e-commerce site was setup six years ago and its primary function is the sale of electronics to Chinese consumers, with its 2010 sales expected to top one and a half billion dollars. Just two years ago its total income was just £128 million, which shows just how quickly this business is growing as safe shopping online takes off in China.
Many international consortiums are placing money in the stocks of Chinese e-commerce firms and other online enterprises, with video streaming site Youku seeing its shares jump 160 per cent after it traded in the US for the first time.
In China e-commerce is still a growing industry and because of the nation's infrastructure, many of its consumers who buy goods online expect them to be delivered by bicycle courier.
Four hundred and twenty million people have internet access in China, with many more joining the web experience each day, which means that the market for e-commerce is massive.
Last year, the industry was worth £24.35 billion, which is almost twice as much as the previous year. Within two years this could increase a further three times, according to Chinese analyst firm iResearch. Big name retailers like Amazon also operate in China, although domestic competition is clearly strong.