BEIJING: Online retailer Vipshop Holdings Ltd is investing 30 million euros ($34 million) in French flash-sales site Showroomprive.com to further its overseas expansion, the Chinese company said on Tuesday.
According to Vipshop, based in Guangzhou, Guangdong province, the latest investment is a key step in its “going global” efforts. The company said it was looking forward to further collaborations with Showroomprive in the future.
Lu Zhenwang, an independent analyst at Shanghai Wangqing Consultancy, said the investment is an opportunity for Vipshop to add more high-end products to its portfolio and expand customer base.
“Vipshop’s growth momentum is stalling due to the slowing Chinese economy and saturation of online shoppers,” he said.
The Vipshop platform caters to mostly Chinese domestic brands. “By adding luxury goods to its online platform, Vipshop cannot only gain new customers, but also encourage existing customers to spend more,” Lu said.
Vipshop posted a decline in revenue growth during the second quarter of the year. Revenue growth fell to 77.6 percent from 136.1 percent in the same quarter a year ago.
French online retailer Showroomprive is seeking as much as 373 million euros in an initial public offering to expand.
The IPO is set to value the company at as much as 870 million euros, Co-Chief Executive Officer Thierry Petit said on a conference call.
“There’s a lot of room to grow, and we want to have the weapons for it,” Petit said. “The world’s strongest fashion brands are in France, in Italy. There’s no doubt about the attractiveness of Europe in our industry.”
French flash-sales sites, which offer goods at a discount for a limited period online, are targeting shoppers in neighboring countries to cope with a crowded market at home.
