China Daily (Hong Kong)

Online fashion retailer eyes US public offering

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BEIJING — Meilishuo, a Chinese online fashion retailer backed by Tencent Holdings Ltd, is in talks with several investment banks about a US initial public offering that could value the startup at about $4 billion, according to people familiar with the matter.

The women-focused online retailer hosted a meeting to discuss the prospects of an initial public offering with potential advisers and underwrite­rs, the people said, asking not to be identified because they were talking about private negotiatio­ns.

Meilishuo merged with rival Mogujie in 2016 to form a company with $3 billion in sales, and was said to have been valued at $3 billion at the time of that deal.

The company, whose name means “Beauty Talk,” is one of the more popular fashion and cosmetics retailers online, a niche it’s clung to despite the dominance of Alibaba Group Holding Ltd and JD.

Meilishuo’s envisioned $4 billion valuation is an initial target and could change if a deal proceeds, the people said. The company didn’t respond to requests for comment.

This is another Chinese technology company looking

billion

to sell shares to the public. Smartphone maker Xiaomi Corp is seeking a valuation of as much as $100 billion in a much-anticipate­d offering, people familiar with the matter have said, while Meituan Dianping, the mainland’s largest provider of on-demand online services also backed by Tencent, has begun discussion­s about a Hong Kong IPO at a valuation of at least $60 billion, media reported.

Statistics showed that 58.3 percent of Meilishuo’s users are ages 23 to 30, while the family monthly income of more than 75 percent of users was between 10,000 yuan ($1591.4) and 20,000 yuan.

As of 2016, the company had about 15,000 merchants on its website and a mobile applicatio­n that had been downloaded 100 million times. That year, it merged with Mogujie, founded in 2011 with about 130 million registered users.

“Tencent wants to develop e-commerce via its partners,

so Meilishuo could get a lot of resources and help,” said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. “It still depends on how the overall market performs, it would be a good year to fetch good valuation for e-commerce sector.”

Furthermor­e, JD and Meili Inc, the parent company of Meilishuo, announced the establishm­ent of a new joint venture in January, as JD hopes to tap more female shoppers to compete with Alibaba’s Tmall.

The new company will build and operate a social commerce platform leveraging JD’s current level-one entry point on WeChat, Tencent’s popular social media platform.

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