A Chinese company few Americans have heard of is gearing up for what could be the largest Internet IPO in U.S. history.
The company, Beijing Jingdong Century Trading Co., runs 360buy.com, a fast-growing online-shopping site that sells a broad range of goods, mostly direct to consumers, much like Amazon.com Inc. This business-to-consumer part of China’s online shopping market is expected to expand more than fivefold to 650 billion yuan ($100 billion) over the next three years, according to Beijing-based research firm Analysys International.
Jingdong hopes to raise as much as $4 billion to $5 billion from an initial public offering in the first half of 2012, people familiar with the situation said last week. If it succeeds, it would overtake Google Inc., whose $1.9 billion IPO in 2004 makes it the current record holder for Internet companies.
Bankers from several major securities firms recently flew to Beijing to vie for the assignment in a so-called “bakeoff” competition, expected late this week.
Market weakness in the months ahead or investor wariness toward China stocks could trip up Jingdong’s plans. Many Chinese stocks that listed in the U.S. earlier this year are trading at less than their IPO prices, thanks in part to a spate of accounting scandals.
In addition to setting a new benchmark for IPOs, a successful Jingdong deal could heat up an intensifying rivalry between the company and Alibaba Group Holding Ltd.’s Taobao, long China’s undisputed champion of online shopping.
Today most of the money Chinese consumers spend on online purchases of everything from clothing to furniture and cellphones flows through Alibaba Group’s sites. Total transactions on those sites last year neared 400 billion yuan, or around $62.5 billion. Taobao doesn’t disclose its financial results