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Economy

Following Alibaba, its online merchants now eye listings

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2016-05-25 09:09China Daily Editor: Feng Shuang
Five consumers from around the world leave their handprints on digital devices to mark e-commerce giant Alibaba Group Holding Ltd's announcement that its revenue hit 3 trillion yuan for April 2015 to March 2016 fiscal year.XU KANGPING/CHINA DAILY
Five consumers from around the world leave their handprints on digital devices to mark e-commerce giant Alibaba Group Holding Ltd's announcement that its revenue hit 3 trillion yuan for April 2015 to March 2016 fiscal year.XU KANGPING/CHINA DAILY

Rome was not built in a day. Nor was any other great city, town, village or company. But in China's rapidly growing internet industry, a potential market-leader, it seems, can be built from scratch within five years.

Three Squirrels is a shining example. It launched on Tmall, Alibaba Group Holding Ltd's online marketplace, in mid-2012. Today, it is China's largest snacks brand in e-commerce.

It started by selling nuts like cashew and pecan. Its 2015 sales reached 2.5 billion yuan ($385 million).

Three Squirrels is an "asset-light company"-no bricks-and-mortar outlets, no investment in growing nuts itself.

Zhou Ting, chief financial officer of the Anhui-based company, attributed the company's success to "a group of right people doing the right thing at the right time".

The next right move, he said, "is going public".

Three Squirrels is among the emerging group of hundreds of online merchants and internet brands that are looking for funds for expansion.

The companies are eyeing listing on the stock market. They were all born and raised in China's booming e-commerce industry, which pulled in nearly 4 trillion yuan in sales last year from more than 400 million shoppers.

Like Three Squirrels, most of them do not own any factories nor employ production line workers. Some of them do not even sell physical products but peddle services, expertise and technologies.

Their strength is their deep understanding of Chinese online shopping behavior and e-commerce, which helps them to outperform many of the bricks-and-mortar leaders in an incredibly short period of time.

To be sure, there are 44 public companies in China that are involved in businesses related to e-commerce. None of them got listed purely because of their online business.

According to China's e-commerce giant Alibaba, nearly 100 merchants on its online marketplaces have plans to go public.

They are from various industries like clothing, home furnishing, food and electronics. Sector leaders boast a combined valuation of hundreds of billions of yuan.

They plan to use the proceeds of their initial public offerings for business expansion.

  

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