Eastern Home Shopping & Leisure Co Ltd (EHS, 東森購物) yesterday announced plans to list its newly acquired cross-border e-commerce unit in Hong Kong to finance expansion into more Asian markets.
The company is planning a the listing in the second half of next year for Strawberry Cosmetics Holdings Ltd BVI, which operates Strawberrynet.com, an online store that says it serves 210 countries and supports 36 languages.
An initial public offering in Hong Kong would allow for greater fundraising flexibility to back ventures into the Chinese and other Asian markets, said Gary Wang (王令麟), chairman of Eastern Media Group (東森集團), the parent company of EHS.
Wang said he aims to build a vertically integrated e-commerce supply chain centering on Strawberrynet’s global network of suppliers and vendors to break into the Chinese market.
“There is little chance for success in the Chinese market for new entrants who only sell Taiwanese products,” Wang said.
Strawberrynet has established itself as a global procurer with just about 100 employees and the portal has provided a foundation that would have taken EHS decades to build, Wang said.
It is imperative that Taiwan’s e-commerce operators broaden their reach beyond the domestic market, he said.
Consumers are no longer bound to domestic e-commerce operators, Wang said, adding that Taiwanese companies have felt compelled to match promotional campaigns put on by Chinese rivals, such as the Singles’ Day shopping event.
“Although Taiwan’s e-commerce sector saw sales rise 5.8 percent annually at the end of last year, its profitability has declined as larger multinational rivals such as Shopee (樂購蝦皮) encroach upon its territory,” Wang said, adding that local companies must tap into more than one market to expand their product offerings, as well as their customer base.
EHS in January acquired a 76 percent stake in Strawberry Cosmetics Holdings, which is headquartered in Hong Kong and incorporated in the British Virgin Islands.
EHS reported that profits in the first half of the year rose 61 percent NT$6.86 billion (US$225.76 million) from the same period last year, boosted by Strawberrynet.com as the Taiwanese company began including sales contribution from its investee in May, it said.
Sales in May and last month grew 36 percent and 50 percent respectively from last year, the company forecast.
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