BEIJING, Nov. 11, 2015 /PRNewswire/ -- On October 29, Jiuxian E-commerce Corporation ("Jiuxian.com") was officially listed on China's National Equities Exchange and Quotations, the Chinese version of the OTC Bulletin Board, which is usually referred to as the "New Third-Board Market," with stock code 833919.
Jiuxian.com Chairman Hao Hongfeng said the new listing represents a recognition of the company's success and its six years of rapid development, which is of great significance for its future. We will continue cultivating the wine market, with the power of the new capital, to meet upcoming market opportunities and challenges, in order to keep the leading position.
A representative from Rich Land Capital, the second largest investor of Jiuxian.com, congratulated Jiuxian.com's new listing. He said that Jiuxian.com's steady and rapid growth in recent years had confirmed its value. It has received a positive response from the capital market for leading the online alcohol retailing market. He hopes the new listing can further boost its growth in the market.
Capital for rapid business expansion
Jiuxian.com's capital expansion has always received great attention from the industry.
Since 2011, Jiuxian.com has carried out seven rounds of financing, the total amounting to 1.43 billion RMB, with investors such as Sequoia Capital, Oriental Fortune Capital, Rich Land Capital, China Renaissance. Following CDB Capital's 300 million financing in June 2014, Merrysunny and a number of institutions and individuals invested 500 million yuan in Jiuxian.com through multiple rounds of financing in May this year, marking the largest equity financing in the industry.
With the new listing, the company made another important step in the capital market of the industry. Jiuxian.com issued a total of 136 million shares of stock, which includes 96.60 million unrestricted shares, with the former Top 4 shareholders: 10.98 million shares of Woyantouzi (holding 8.0765%), 9.89 million shares of Hongshanjuye (holding 7.2709%) and 7.84 million shares of Puluojiuxian (holding 5.7692%).
For the industry, Jiuxian.com's new listing and the recent 500 million financing helps to further integrate resources within the Online Alcohol Retailing market, hoping to achieve a leap forward. Meanwhile, the success in completing the new listing is bound to improve the overall valuation of Jiuxian.com, further raising the threshold of the competition, as well as revealing the benefits of economy of scale.
Jiuxian.com is composed of four main business segments: online retail B2C (Jiuxian.com), online bulk sale B2B (Jiutuangou), instant sale service O2O (Jiukuaidao) and integrated brand management services.
All along, B2C is the core business of Jiuxian.com and has a steady growth rate. Since 2014, Jiuxian.com began laying out plans for B2B and O2O, as well as tried to customize online retailing services, which achieved good market response.
In 2014, B2B business accounted for 7.34% of net income of the company, and increased to 12.98% in the first quarter of 2015, which shows a rapid growth. O2O business is also greatly developing, having begun to experience the next line of services, has showed high activity. We are actively exploring this business model.
Hao Hongfeng said that the B2B and O2O segments will be the main developing segments of the company. Current, B2C segment has become realtively mature, but B2B and O2O segments are still relatively new. Jiuxian.com has taken the first mover advantage and a leading position in these segments. In its first year, B2B business segment has expanded to cover more than 1000 regions of the country, and has more than 200,000 members. We are targeting to obtain one million members in the next three years.
With the continuous education of consumers, B2B and O2O segments will rapidly grow, and share similar importance with B2C segment in the company.
Leader of industry
While expanding rapidly, Jiuxian.com is also moving quickly in the capital market. It is not just the leader in the online alcohol retailing industry, but also follows the alcohol industry's development trends, which makes it an important indicator to industry changes.
Prior to 2012, Jiuxian.com was in the stage of educating and obtaining customers, laying the ground work for future growth. It began to grow and expand rapidly in 2013. This was due to some new challenges the alcohol industry is facing including new retailing channels, especially the growth of online retailing.
Since 2013, the new spending restriction of the central government has caused significant decline in the liquor industry as it was the main consumer in the market. The "golden 10 years" has ended and the industry went into a deep restructuring phase. Alcohol consumption has turned its focus to mass consumption. In this case, the value of liquor retailing channels began to attract more attention. Traditional liquor companies have sensed the importance of working with online retailers thus gradually changing its sales channels. Currently about 80 percent of liquor companies have connected with Jiuxian.com to work together.
Moreover, with Internet applications and e-commerce further expanding, as well as growing awareness within the masses, online retailing obtained significant developments.
Through the grasp of the industry trend and the rise of the Internet, Jiuxian.com was able to quickly develop and grow, and thus leading the whole industry towards the trend. It is worth mentioning that, after the C round of financing, Jiuxian.com has received larger and more frequent financing, which is due to rising market.
Throughout the development of the past few years, Jiuxian.com gradually opened up the online liquor retailing channels and mobile terminal sales channels. It was able to visualise the layout of the B2B and O2O segments ahead of competitors. In addition, Jiuxian.com also continued to improve the supply chain, logistics, warehousing and other aspects to form a standardized offering. It has played an exemplary role in standardization of the industry.
While helping traditional liquor companies to a broader market, Jiuxian.com is joining hands with them to develop new products for consumers online. With millions of members, the accumulated data, large-scale transactions and a professional operation team, it provided broader retailing channel and marketing platform, and actively participate in the transformation of the industry. Its contribution has been recognized by the market.
Despite the current challenges, the liquor industry is still expecting a great future growth. Analysys International's report shows that the market is expected to break a trillion yuan in 2016, and online liquor sales is expected to account for 5.6% of the entire liquor industry in 2017, which is nearly 60 billion yuan. By then, the liquor online retailer will join traditional companies to achieve a prosperous market together.
The new listing of Jiuxian.com is an important cornerstone for the company itself, but also a boost to the valuation and importance of the online liquor retailing market. In the future, the rise of online liquor retailing will bring the entire liquor industry more changes and opportunities.
