Vancl to Expand in East China Markets
National Business Daily, 10/20/10
Chen Nian, CEO of Chinese B2C online clothing retailer Vancl, recently said Vancl will focus on expanding in the east China market outward from Shanghai, its core market. Shanghai has accounted for 12.1% of national sales for the last three quarters, according to Vancl's figures. The Nanjing-Hangzhou-Suzhou tri-city area has a developed online shopping market with great potential, said Chen. He added that Vancl's Shanghai warehouse will expand this year from over 30,000 square meters to 100,000 square meters.
Chen said that Vancl is not discussing profitability at this stage, and there is no IPO timetable, though the company has good cash flow. Logistics currently take up the largest share of costs, and Chen said that gross profit margins are down despite increased investment in delivery services. However, Vancl expects sales to reach RMB 2 bln this year, at worst RMB 1.6-1.7 bln.
Vancl's e-commerce apparel site Vjia has reached monthly revenues in the tens of millions of RMB since launching in May, with peak daily sales exceeding RMB 1 mln. The Vjia and Vancl websites currently share technology, warehouses and distribution, but Chen said the two will become more distinctly separate in the future. Profit margins for Vjia are between 20% and 30%, while Vancl has higher margins but still not above 40%.
Keywords: Chen Nian Vancl apparel e-commerce Internet profit B2C logistics VJia eastern China revenue
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