China's 360buy.com considers US share sale in 2012

360buy.com website Jingdong Mall sells everything from electronics to fashion accessories

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Chinese online retailer Jingdong Mall is considering a share sale in the US next year that could be among the biggest internet IPOs.

The company, also known as 360buy.com, could raise between $4bn and $5bn (£2.5bn to £3.1bn).

Jingdong Mall has not yet commented publicly on its plans, although they have been widely reported.

It would be the latest in a series of Chinese internet companies trying to sell shares to US investors.

The company's plan to raise up to $5bn, which was first reported in IFR, would make it the largest initial public offering (IPO) from an internet company, beating Google's record of $1.9bn in 2004.

'Tainted' stocks?

Bankers in Beijing are understood to be meeting with Jingdong Mall next week to discuss the share sale.

However, the US market has not turned out to be a sure bet for many Chinese internet companies in recent months.

The likes of e-commerce site DangDang and social networking site Renren saw spikes in share price on their debuts, but have since seen interest wane.

Another concern is that some US investors are being cautious after a series of fraud and accounting-related scandals were discovered in US-listed Chinese companies.

Start Quote

People look at Jingdong right now and think, wow these guys are a powerhouse, they are a monster Amazon and Ebay all wrapped into one”

End Quote Michael Clendenin RedTech Advisors

"There's a bit of taint on Chinese internet stocks right now, but I don't think it's a well deserved taint," said Michael Clendenin, managing director of RedTech Advisors in Shanghai.

He said that one or two frauds should not tar the whole market.

"The smart money will understand that the opportunity here vis-a-vis the reward far outweighs the risk," he said.

Increasingly competitive

Jingdong Mall also faces a tough battle at home.

Competition is intensifying in the the Chinese internet market with new players vying for users.

Mr Clendenin said this created an urgency for Jingdong Mall to list on the stock market as soon as possible, so that new competitors would not have the chance to establish themselves.

"People look at Jingdong right now and think, 'wow, these guys are a powerhouse, they are a monster Amazon and Ebay all wrapped into one'," Mr Clendenin said.

"But next year there will be a threat to their main market from the likes of Tencent and others, as well as offline retailers that are moving online."

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