Jumei, a Chinese online cosmetics retailer, filed for IPO in the U.S. on April 12, 2014. Jumei planned to finance for USD 400 million under the ticker “JMEI” in NYSE or Nasdaq, its issuing price has not been revealed.
According to Jumei’s financial report, Jumei’s revenue reached USD 483 million in 2013 while the GMV in 2012 was USD 233.2 million. Jumei realized USD 8.104 million net profit in 2012, it increased to USD 25 million in 2013. Jumei’s GMV hit USD 816.6 million in 2013, ranking the first in China cosmetics retailers. Its active users grew to 10.536 million in 2013. It had 6.529 million repeat customers and 8.224 million new customers.
Jumei tried to compare itself with Vipshop, and its financial report seemed even better than Vipshop’s. For example, Jumei’s mobile terminal sales accounted for 49%, while Vipshop had 23% in mobile terminal. Jingdong’s mobile sales accounted for 18%, dangdang’s accounted for 10%. Just like Vipshop, Jumei’s business model is also flash sale and special offer. As for repeating purchase rate, Jumei had 88.9% repeating purchase orders which was amazing and higher than Vipshop’s 73.8%. Compared with Vipshop, Jumei has been making net profit consecutively for 6 quarters.
Will Jumei become another successful stock like Vipshop?
Jumei’s excellent financial report could not cover up its two major problems.
First, the curse of “counterfeit cosmetics products” will affect the growing of online cosmetics retailers. In March 2013, the fight between Jumei and its competitor Lefeng by accusing each other selling counterfeit products jeopardized all cosmetics online retailers’ credit. The rumor actually came from the fact that international cosmetics brands all use offline channels and did not delegate online e-commerce enterprises their brands. Once consumers don’t trust online retailers, offline cosmetics brands would claim that they never delegate online retailers and assert that those online retailers sell counterfeit products. What’s worse, Chinese female consumers love international brands rather than cheap and good domestic brands.
Second, Jumei does not have internet giant’s back up. Without it, Jumei might be difficult to guarantee the traffic. Vertical e-commerce enterprises are being isolated when integrated e-commerce enterprises like Alibaba and Jingdong dominate China market. Vertical e-commerce websites are forced to join the platforms. Iconic events include dangdang opening Tmall store and SF Express opening Jingdong store.