Suning Keeps Shopping to Keep the Game on

Suning was rumored to be in talks with OKBuy, the Chinese Zappos wannabe, about a potential buyout, according to local portal Sohu. The report noted that actually Suning was approached by OKBuy as the latter is facing a shortage of capital and is looking to sell the company, but deal was compromised over the two parties’ disagreements on valuation and acquisition cost.

Implications? First of all, vertical B2Cs seemed to be doomed in China after a string of ‘defeats’ ranging from Letao, Masa Maso, VCotton (shut down already) to RedBaby. Suning acquired RedBaby this September with US$ 66 million, blowing off RedBaby’s dreaming IPO. RedBaby, the maternity-child vertical raised more than US$ 120 million in several rounds, which means its investors’ patience wore thin and would rather sold the asset at 50% discounts.

Letao, the other Zappos wannabe, shifted its focus away from selling 3rd party brand shoes (the likes of Nike, Adidas and so forth) to promoting own-branded shoes, which according to the company are more profitable with higher margins, supposedly.

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