Macy’s invests $15m in China’s VIPStore

VIPStore has already received four rounds of institutional funding from venture capital investors since it was founded in late 2009. The Series D round, worth $23.7 million, took place in September 2011 and was led by Intel Capital. Litian Investment and HGI Capital also participated alongside existing investors GSR Ventures and Taishan Invest. Green Pine Capital and Chinese Founders Fund supported the company in earlier rounds.

At the end of last year, VIPStore claimed 2 million registered users and was generating monthly sales of over RMB10 million ($1.5 million). However, it has yet to turn a profit, partly due to aggressive investment in building scale and market share.

This is not unusual among Chinese internet companies. Rival online retailer VIPShop, which raised $72.7 million in a poorly received IPO on the New York Stock Exchange in March, had 12.1 million users at the end of 2011 and revenues were $227.1 million, up from $2.8 million in 2009. However, losses widened during this period, rising from $1.38 million to $107.3 million.

VIPStore has partnerships with more than 500 luxury brands worldwide, including LV, Dior, Prada, Gucci, Burberry and Estee Lauder. Omei.com was introduced to complement VIPStore's initial business, flash sales site jianpin.com, which offers limited-time discounts on select items.

"Our relationship with VIPStore will allow us to gain additional experience in the fast-growing Chinese market, and to better understand how consumers across China interact with Macy's and the products we sell," said Terry J. Lundgren, chairman, president and CEO of Macy's. "We know that Macy's is very well known and regarded in China ... but we still have a great deal to learn about the shopping patterns and merchandise preferences of consumers in China's very diverse and rapidly emerging consumer marketplace."

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• Topics
• Greater China
• Technology
• Consumer
• Expansion
• Consumer
• TMT
• China
• Growth capital
• Intel Capital
• GSR Ventures