SINA PUSHING IN E-COMMERCE MARKET WITH MECOX LANE DEAL

AsiaInfo Services
03-03-2011
Sina Pushing in E-commerce Market with Mecox Lane Deal

SHANGHAI, Mar 03, 2011 (SinoCast Daily Business Beat via COMTEX) -- Sina Corporation (NASDAQ: SINA), one of the most renowned online service providers in China, is trying to make a push in the lucrative e-commerce market with an investment in Mecox Lane Ltd. (Nasdaq: MCOX).

Sina will shore up Mecox Lane in its evolution to an e-commerce company, said Charles Chao, chief executive officer for Sina, noting that Mecox Lane, with a majority of revenue to come from e-commerce business in the future, has built up its own sales network.

"The investment in Mecox Lane marks Sina's first push in the e-commerce market," pointed out Mr. Chao in a teleconference after the plan to buy a stake in the online apparel retailer was revealed, "Sina hopes to find an approach that leads directly to the e-commerce market, taking its vast user base and traffic base into consideration."

Mecox Lane, one of the fast-expanding online apparel and accessories retailers in the country, announced yesterday that Sina and China Dongxiang (Group) Co., Ltd. (SEHK: 3818) have agreed to buy a 29% stake in Mecox Lane from its two majority shareholders.

Under the agreements, Sina will buy 76.986529 million ordinary shares, representing 10.998075 million ADSs or around 19% of the outstanding shares, paying USD 0.8571 for each of the ordinary share or USD 6.00 for each ADS.

In addition, the two buyers have secured options to purchase additional shares, with Sina entitled to buy 48.254173 million ordinary shares and Dongxiang Group allowed to buy 18.306117 million at an exercise price of USD 1.1429 per ordinary share or USD 8.00 per ADS.

The e-commerce market, especially the business-to-consumer (B2C) segment, have been growing at a brisk pace in the past six quarters, driving up advertising revenue for Internet portal operators like Sina, according to Mr. Chao.

Sina will get a representative appointed as director at Mecox Lane after the deal. Kelvin Yu, a vice president for Sequoia Capital, will step down as director of Mecox Lane. The shares to be acquired by Sina and Dongxiang Group will enter into a one-year lock-up period starting from the closing date of the deal.

The strategic cooperation with Sina and Dongxiang Group will give Mecox Lane a boost on its way to the leader in the online fashion shopping market, said Alfred Gu, director and chief executive officer for Mecox Lane. The company and Sina will work together in online marketing and will see each other as the most preferential partner in online advertising products and services.

Source: www.yicai.com (March 03, 2011)

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