Vancl extending its reach to HK
Bien Perez Dec 11, 2009
Vancl (Beijing) Technology, ranked yesterday as the mainland's fastest-growing high-technology firm, plans to expand into Hong Kong soon, as it broadens the reach of its online clothing retailing business.
Chief executive Chen Nian disclosed the plan yesterday as Deloitte, the global advisory service, announced that Vancl topped its ranking of the 500 fastest-growing technology companies in Asia.
"We want to enter Hong Kong this year," Chen told the South China Morning Post(SEHK: 0583, announcements, news) .
"We find this market to be very appropriate for Vancl and plan to soon find a distribution channel."
The privately held firm that Chen founded in October 2007 runs the internet shopping portal Vancl.com, which directly markets and sells to mainland consumers its own brand of garments for men, women and children, in addition to shoes, accessories and home furnishings.
Jolyon Barker, the group managing partner at Deloitte's technology, media and telecommunications practice, credited Vancl for an estimated 29,576 per cent revenue growth rate over the past three years, enough to easily seize the No1 spot in the fast-500 list this year.
Online market analyst firm iResearch estimated Vancl had a dominant 28.4 per cent of the mainland's business-to-consumer online garment retailing market in the first half. Vancl, which has more than 800 workers, says it sells about 50,000 pieces of garments a day.
William Chou, the lead executive at Deloitte China's technology, media and telecommunications group, attributed Vancl's rapid growth to the growing fondness of mainland consumers for shopping online, the firm's focus on selling strictly apparel, its wide distribution and customer service.
Other mainland online vendors offer a broad portfolio of products and often lack customer support.
Vancl's lifestyle-brand approach to selling a specific collection of attractive and low-cost merchandise on the internet also combined what appears to be retailing lessons learned from Britain's Marks & Spencer, Amazon.com in the United States and Chen's own e-commerce experience on the mainland.
Chen was the founder and executive vice-president of Beijing-based online bookstore service Joyo.com, which was acquired in 2004 by Amazon for US$75 million and transformed into its regional website.
"We've only touched the tip of the iceberg, with a customer base of two million to three million buyers out of 300 million internet users in China," said Chen. "We expect further growth as we focus on innovation and improving customer experience."
Vancl expects its annual revenue to rise about 100 per cent this year from 300 million yuan (HK$340.59 million) last year. Sales in its first year reached only 1.12 million yuan.
The mainland's business-to-consumer online apparel shopping market is forecast to record revenue of 2.4 billion yuan this year and 18 billion yuan in 2012, according to iResearch.
Barker said Vancl's stellar performance in the past three years had clearly skewed the average revenue growth rate in the Deloitte fast-500 list's top five, which collectively posted 8,980 per cent in average revenue growth over the past three years.
Vancl is the third mainland high-technology firm to make it to the top of Deloitte's annual regional survey. It follows solar-panel maker Trina Solar in 2007 and handset developer TCL (SEHK: 1070, announcements, news) Mobile Communication, the original winner.