JD.com Increases Stake in Online Retailer Vipshop to 7.6%

JD.com raised its stake in Vipshop to 7.6 percent this month from 5.5 percent in 2017, .

Belinda Zhou
    Aug 21, 2019 6:00 PM  PT
JD.com Increases Stake in Online Retailer Vipshop to 7.6%
author: Belinda Zhou   

China's e-commerce giant JD.com Inc. (Nasdaq: JD) has increased its investment in Vipshop Holdings Ltd. (NYSE: VIPS) with an additional $55.8 million.

JD.com Investment Ltd., an arm of JD.com, has increased its stake in Vipshop to 7.6 percent, holding an aggregate of 10.1 million shares on the basis of 133.1 million ordinary shares, according to a filing with U.S. Securities and Exchange Commission. JD's entities, JD Global Investment Ltd. and Windcreek Ltd., held approximately 460,000 shares and 9.7 million shares respectively as of Aug. 14, the filing showed.

Windcreek and JD Global Investment started acquiring Vipshop's American depositary shares in June 2018 when they purchased an aggregate of 5.9 million ADSs in the open market at a weighted average trading price of $9.4264 per ADS. In June 2018, JD.com held a 6.8 percent stake in Vipshop through Windcreek. 

In December 2017, JD.com and China's tech conglomerate Tencent Holdings Ltd. (HKEX: 0700) announced to invest in Vipshop where JD claimed to invest $259 million for a 5.5 percent stake. Tencent said it would invest $604 million in exchange for a 7 percent stake in Vipshop, and it raised the holding to 8.7 percent in March.

Vipshop saw solid growth in 2019, and its revenue in the three months through March jumped more than 7 percent to $3.2 billion from the corresponding period of 2018. Gross merchandise value, which measures all the products and services sold through Vipshop online sales business and marketplace platform during the first quarter, totaled 33.8 billion yuan, up 11 percent than one year ago. 

Eric Shen, the chief executive officer of Vipshop, described the apparel-related categories as its bread and butter in the conference call and said the company's GMV grew 16 percent year-over-year in its earnings release in May

Vipshop said it expects its revenue to reach between 20.7 billion yuan and 21.7 billion yuan, or about $3 billion, in the second quarter, representing a year-over-year increase of up to 5 percent. 

Shares in JD.com closed at $30.74 apiece, down 2 percent. Vipshop's shares dropped 2 percent to $8.45 Wednesday.


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