Last night, a Sina Weibo post broke that Pinju, the Shanda online retailing arm would be shutting down in next week. When asked about the rumor, Ge Binbin, founder and CEO of Pinju surprisingly admitted that “no more rumor refuting! Our funding hasn’t been available yet. Pinju will make an official announcement in next week to relieve all its suppliers.”
And it’s been less than 3 month since Pinju’s debut in October of 2011.
We first heard of Shanda’s revelation of investing into ecommerce to catch up with Taobao, the de facto Chinese C2C market dominator. Ge once remarked that even as strong as Taobao, the company still has its Achilles’ Heel. Taobao has way too many merchants and products that it’s sometimes quite hard to tell genuine products from the counterfeit ones. And he believes that Pinju is able to carefully handle this problem. Pinju planned to outrun all other competitors coming in second only next to Taobao and to go public in three years.
Prior to his abrupt jump into the heated ecommerce market, he served as CEO of 12ha.com, a causal game developer owned by Shanda Games.
Shanda was reportedly investing over RMB 2 billion (US$ 309 million) into Pinju.com with two other undisclosed participants while the game giant would accounts for 40% of the total sum, or US$ 123 million.
Interestingly or oddly enough, Shanda never ever mentioned ecommerce business in public, let alone referred to Pinju.
It once seemed a joke to many ecommerce observers.
When Ge announced Pinju in earlier last year, both industry observers and analysts were confused, having no idea what’s going on with Shanda. Seriously? Shanda and C2C?
We did notice Shanda has been trying so hard to invest into or in-house develop into various territories, for instance, Youni (Kik-like service), Tuita (one of the many Chinese Tumblrs), 3rd party Android market Nduoa, 1Q84.fm (music service) and Qieke (online travel service turned foursquare copycat), but none of them stood out from their rivals to justify Shanda’s reputation in gaming business. Given its rather lousy track records in diversifying businesses, it’s no surprise that the industry took this move as some sort of a joke.
Shanda’s setback in Pinju also highlighted capital market’s attitude toward ecommerce, spring for China online retailing has long gone and now winter sets in. For those who’re still struggling in the market, it’s time to chop down costs (marketing, headcount, new customer acquisition cost and so forth) to weather the chilling season.