SHANGHAI, Aug 19, 2011 (SinoCast Daily Business Beat via COMTEX) -- Internet firms in China are in a race to make a deployment in the business-to-consumer (B2C) market by joining force with shoes e-commerce firms in the country.
The collaboration between Internet giants and online shoes retailers has become a hot topic in China, reflected by numerous stories about Internet giant-online shoes retailer alliance like Tencent Holdings Limited (sehk:0700)'s capital injection into Okbuy.com, Baidu, Inc. (BIDU)'s partnership with Belle International Holdings Ltd. (sehk:1880), Alibaba's USD 15 million investment in S.cn, as well as Tencent Holdings, Baidu, and Alibaba's attempt to approach Letao.com for possible cooperation.
A July 2011 report on the B2C traffic in China from Analysys International showed that Okbuy.com saw its traffic expand substantially after a tie with Tencent Holdings. Yougou.com, an online shoes sales platform backed by Baidu, edged into the Top Three vertical website list by traffic.
Surprisingly, Letao.com, one of the popular online footwear retailers in China, topped the list in July. Statistics from Alexa.com, a third-party traffic firm, indicated that Letao.com, the No. One player in the shoes B2C market in China, ranked 2,318 in the world, followed by Okbuy.com and Yougou.com, whose ranking came to 3,565 and 7,926, separately.
Letao.com has completed three rounds of fundraising by far, getting fresh capital from several leading venture capital (VC) firms like Ceyuan Ventures, Tiger Fund, and DT Capital Partners.
Alibaba, Tencent Holdings, and Baidu had tried to contact Letao.com for a possible alliance as early as 2009, said Chen Hu (transliterated), vice president for the Beijing-based company, noting that the heavyweights turned to the smaller peers of Letao.com after their attempt to join force with Letao.com went fruitless.
Notably, online footwear retailers in China are likely to kick off a price war in a bid to survive in the formidable competition, a move that market observers say will possibly trigger a reshuffle in the online footwear retail market.
Okbuy.com, one of the emerging online sneaker retailers in the country, kicked off an aggressive promotion campaign in what is called the first since its debut to boost sales on July 15, when its new rival Yougou.com came into service.
Okbuy.com reported sales revenue of CNY 200 million for the year 2010, when Letao.com reaped sales revenue of CNY 140 million. Belle International said that its shoes business same store growth stood at 22% in the first quarter of 2011.