LightInTheBox Is No JD.com, Dangdang, or Vipshop

With JD.com (Nasdaq: JD) set to price tonight and begin trading tomorrow, we've had three publicly traded Chinese e-commerce specialists step up with fresh financials. LightInTheBox  (NYSE: LITB  )  reported this morning; E-Commerce China Dangdang  (NYSE: DANG  )  and Vipshop  (NYSE: VIPS  )  announced quarterly results last week. 

All four companies have entirely different areas of specialty. JD.com is China's largest online direct sales company, with 46.5% of the B2C market. It's huge, clearing $20.7 billion in gross merchandise volume last year. Dangdang started out as an online bookseller, but has since expanded to offer more general merchandise. Vipshop offers flash sales of branded apparel at steep discounts. 

Then we have LightInTheBox. The Beijing-based company sources special-event dresses, household fixtures, and other items locally, but ships globally. Nearly two-thirds of its sales are actually going to Europe, where it opened a fulfillment center earlier this year. 

LightInTheBox put out mixed financial results this morning. The bad news is that it reported a larger loss than analysts were expecting for the third quarter in the row. A deficit of $0.19 a share -- reversing a small profit from a year earlier -- is nearly twice as bad as the $0.10-a-share hit that Wall Street was forecasting. This is an unwelcome trend that's even more problematic because LightInTheBox went public last summer. The only LightInTheBox that we've known is the one that can't seem to get the bottom of its income statement in order.

The good news is that revenue did surpass expectations. Revenue climbed 11%, to $81.5 million, fueled by a 41% spike in orders. That naturally means that the average order is smaller, but it's only because sales of special-occasion dresses aren't growing as quickly as cheaper electronics and other general merchandise. Either way, analysts were only holding out for $79.7 million on the top line after LightInTheBox's own guidance was forecasting 6% to 9% growth for the period back in February.

LightInTheBox will probably continue to be a busted IPO until it returns to profitability, but it's arguing a good case in its favor this morning by calling for sequential improvement on the bottom line, with revenue growth accelerating. The Chinese e-tailer sees revenue for the new quarter growing by 16% to 19%, clocking in between $84 million and $86 million. Wall Street was only targeting $83.1 million.

These are still puny numbers compared to what JD.com will be bringing when it makes its market debut tomorrow. It's also a far cry from the profitability, revenue, and revenue growth that Dangdang and Vipshop posted last week. Dangdang's revenue climbed 30%, to $285.6 million, squeezing out a small profit along the way. Vipshop has been the rock star here, with net revenue skyrocketing 126% to $701.9 million, and profitability more than quadrupling. 

LightInTheBox can counter that at least it beat analyst revenue targets and put out guidance ahead of market expectations. Dangdang disappointed investors on those fronts. Either way, Dangdang, LightInTheBox, and Vipshop may as well enjoy the limelight while it lasts. Once the larger JD.com and Alibaba begin trading, they may be struggling to draw investor attention.

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  • Report this Comment On May 21, 2014, at 3:31 PM, Tbone24 wrote:

    Dang has never done anything to increase shareholder value so why would they start now? They were the first to IPO and soon will be next to last in market cap. Their CEOs are headstrong and inflexible and radiate an arrogance that turns investors off. That's why only have 750 million cap after 15 yrs in business

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