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Dangdang's 4Q profit slips 33% to 14.8m yuan
By Ding Yining |
March 10, 2011, Thursday
|
Online Edition
Online Edition
MAJOR online retailer Dangdang.com said its fourth quarter profit fell 33 percent year on year to 14.8 million yuan (US$2.2 million) due to a change in accounting.
Dangdang, which started as an online bookstore, has expanded aggressively into other product categories, including daily necessities and general merchandize.
The company raised US$272 million after its listing on the New York Stock Exchange in December.
Sales jumped 58.7 percent year on year to 710.9 million yuan in the fourth quarter and its whole year sales stood at 2.28 billion yuan, up 56.5 percent from 2009.
Competition is intensifying among Chinese shopping websites, such as 360Buy, an online home appliances retailer, and Alibaba Group's C2C site Taobao.com.
"Expanding to groceries and general merchandize is a big trend for online retailers but larger sales contributions from these categories may take a long process," said analyst Zhang Yanping at iResearch Inc.
Dangdang's income from groceries accounted for 22 percent of its total sales, compared with 14 percent a year ago.
"Grabbing more market share is much more important than boosting income. Sales from groceries should post significant growth in the coming quarters," said Peggy Yu, Dangdang executive chairwoman.
She said major tasks in the coming months will be optimizing product search and advertising system on the website, rather than large-scale promotions.
Morgan Stanley put an "Equal-weight" rating on the stock in a research report released yesterday and said Dangdang already has an advantage over China's booming e-commerce market.
Yu also warned about cost increase due to rising prices of books and other products but she did not elaborate on the inflation impact on her company.
The company expects first quarter sales to rise 50 to 52 percent year on year to between 673 and 681 million yuan.
Dangdang, which started as an online bookstore, has expanded aggressively into other product categories, including daily necessities and general merchandize.
The company raised US$272 million after its listing on the New York Stock Exchange in December.
Sales jumped 58.7 percent year on year to 710.9 million yuan in the fourth quarter and its whole year sales stood at 2.28 billion yuan, up 56.5 percent from 2009.
Competition is intensifying among Chinese shopping websites, such as 360Buy, an online home appliances retailer, and Alibaba Group's C2C site Taobao.com.
"Expanding to groceries and general merchandize is a big trend for online retailers but larger sales contributions from these categories may take a long process," said analyst Zhang Yanping at iResearch Inc.
Dangdang's income from groceries accounted for 22 percent of its total sales, compared with 14 percent a year ago.
"Grabbing more market share is much more important than boosting income. Sales from groceries should post significant growth in the coming quarters," said Peggy Yu, Dangdang executive chairwoman.
She said major tasks in the coming months will be optimizing product search and advertising system on the website, rather than large-scale promotions.
Morgan Stanley put an "Equal-weight" rating on the stock in a research report released yesterday and said Dangdang already has an advantage over China's booming e-commerce market.
Yu also warned about cost increase due to rising prices of books and other products but she did not elaborate on the inflation impact on her company.
The company expects first quarter sales to rise 50 to 52 percent year on year to between 673 and 681 million yuan.
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