It's full speed ahead for operator of 360buy.com

BEIJING - Jingdong Mall, a major Chinese online retailer, has been in and out of the spotlight.

With the aggressive expansion of its business portfolio, frequent changes in senior management, and rumored plans for going public, Jingdong enjoys both admiration as a possible Chinese answer to Amazon Inc and doubts about problems with its rapid expansion.

Starting as an online shopping site for electronic products, the company has been making greater efforts in recent years to broaden its service portfolio to fend off competition.

It started to offer e-books this week. Last year, it ventured into online travel services, and it began to offer a wide range of products, from clothes to food, even earlier.

Sales of non-electronic products account for 20 percent of Jingdong Mall's total, said Richard Liu, chief executive officer of Beijing Jingdong Century Trading Co, the operator of online retail website 360buy.com.

Half of the company's sales will come from non-electronic products in the coming three years, Liu said on Monday.

Revenues have risen along with its rapid expansion. Liu estimated earlier that for last year, sales probably reached 28 billion yuan ($4.4 billion) to 30 billion yuan, compared with 10.2 billion yuan a year earlier.

However, not all analysts see this rapid growth as a worry-free development.

"Jingdong has greatly boosted its sales, but it has paid a price - low profit," said Chen Shousong, an analyst with domestic research company Analysys International.

Jingdong's gross margin is probably less than 10 percent, he estimated, as electronic products, which contribute most to its revenues, usually have a much lower margin than products such as clothing and books.

To Jingdong Mall, this is all the more reason to expand into more lucrative sectors. Meanwhile, it must transform itself from a "grassroots start-up" to a full-service e-commerce company, Chen said.

Since last year, the company has brought in new managers, including its chief operating officer from Baidu Inc, its chief technology officer from Oracle Corp and its chief marketing officer from Acer Inc.

"Jingdong Mall had only one vice-president three years ago, but now there are more than 10," Liu said.

Beefing up the management is seen as a prelude to going public, with rumors circulating that the company might apply for a Nasdaq listing as early as March. It delayed an IPO plan late last year.

The South China Morning Post reported on Tuesday that Jingdong Mall planned to raise $2 billion to $3 billion through an IPO. It cited unidentified sources.

Liu, however, said on Monday that the company wouldn't consider going public before 2013.

Some analysts warned that Jingdong could face a cash crunch with its aggressive expansion if it doesn't go public to raise funds, but others said that Jingdong has to stick to its current strategy to remain a leader.

"Jingdong has to race forward. If it falters, it will fall easily, because Tianmao is and will remain big," said Lu Bowang, an e-commerce expert in China.

Tianmao, under e-commerce giant Alibaba Group, accounted for the largest portion of sales in China's B2C market last year, or 35.7 percent.

Jingdong Mall ranked a distant second with 13 percent, according to Analysys International.

China Daily