Yesterday, Vipshop Holdings Limited (NYSE:VIPS) was the best performing internationally tradeable Chinese stock globally – up a hefty +9.96% .
Vipshop is the number three player in China’s e-commerce market – right after Alibaba and JD.com. Its business model is very different to Alibaba and JD. It offers branded apparel at steep discounts to consumers through a flash sales model on its vip.com website (Flash sales: Selling limited quantities of deeply discounted products online for limited periods of time). Essentially, the company buys large quantities of products from its partnered brands, then sells certain goods at specific times. The increased quantity allows for deeply discounted prices, and brands want to work with Vipshop for promotional reasons. It also has its own branded product lines, Vipshop Beauty, Vipshop Home and Vipshop Baby.
Based on VipShop’s second quarter 2016 financial results, its growth continues strong. 2Q16 revenue was up 49.0% YoY (RMB 13.44 Billion or US$2.02 Billion) and its income from operations was up 47.1% YoY (RMB 643.9 Million or US$96.9 Million). If the company can keep up its healthy growth trajectory, a much higher stock price can easily be justified.
VipShop is part of Flioz China Shopping Boom portfolio. Get your own copy of China Shopping Boom portfolio from Apple AppStore. Download Flioz investment strategy app for iOS.
This VipShop information is courtesy of a premium China stock portfolios – created by WealthyTec – and offered through the Flioz mobile app for iOS.