PChome Online Inc (網路家庭), the nation’s largest online e-commerce operator, yesterday announced that it would commit NT$1 billion (US$32,561) in its latest round of funding for PChomestore Inc (商店街).
It is to purchase new shares issued by PChomestore at NT$52 each, PChome Online said in a statement, adding that it has secured strategic investors to raise a total of NT$1.9 billion for the consumer-to-consumer business to tap into opportunities in Asia’s mobile economy and e-commerce market.
PChome Online did not disclose the identity of strategic investors it found for PChomestore.
After racking up steep losses, PChomestore last month completed its privatization process as its parent company bought up outstanding shares at NT$44 apiece.
PChomestore chairman Jan Hung-tze (詹宏志) said that the now-private company has seen early results from its sweeping efforts to improve its capital and organizational structure.
Propelled by rapid growth in consumer-to-consumer transactions, revenue in the second quarter is expected to exceed NT$15 billion, Jan said in a statement.
PChomestore has seen rapid expansion in its consumer-to-consumer business following efforts to build customer loyalty and “stickiness,” despite raising its free-shipping threshold for pickups at convenience stores from NT$399 to NT$699.
The platform has seen 110,000 merchants open online storefronts, while the number of items on sale has risen by 100 million to 290 million, cementing Pchomestore’s dominance in Taiwan, Jan said.
Taiwan’s capital market does not cater to growth industries such as e-commerce, where losses are expected as operators spend and expand aggressively to capture market share, Jan has said.
The company would seek greener fundraising pastures abroad, Jan said.
Meanwhile, PChome Online and its subsidiaries reported net losses of NT$588 million in the quarter ended in June, with sales during the period rising 14.3 percent annually to NT$7.84 billion.
Losses per share were NT$2.75, improving from NT$4.03 per share at the end of first quarter.
While PChome Online has said that it has curbed spending on subsidies and promotions across subsidiaries, operating expenses in first half rose 90 percent annually to NT$3.51 billion.
In the first half, PChome Online and its subsidiaries recorded cumulative losses of NT$635 million, compared with being NT$22 million in the red a year earlier. Losses per share were NT$6.79.
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