Retailers shift their ad spending from TV, radio and print ads to digital ads.
By inviting other retailers to sell on its site, Dangdang now generates 60% of its revenue from merchandise other than books. The e-retailer’s sales rose 22% in the fourth quarter.
Chinese online book retailer Dangdang Inc. returned to profitability in the fourth quarter of 2013, largely by expanding its selection by inviting other retailers to sell on Dangdang.com and targeting more affluent consumers, says executive chairwomen Peggy Yu Yu.
“Combined general merchandise sales from both principal and marketplace increased 80% year over year and surpassed those of books and media for the fifth consecutive quarter,” Yu Yu told analysts on a conference call. “We remained the dominant force in China's online books and media sector, generating revenue growth of 28% for the quarter.”
Dangdang, No. 10 in the newly released Internet Retailer China 500, says its revenue grew 22% both in the fourth quarter of 2013 and for the full year.
The rapid development of its marketplace business has helped Dangdang reduce the reliance on books and media products. Books now represent only 40% of the value of goods sold on Dangdang.com, versus 82.6% in 2010, the retailer says.
Nearly 60% of the value of merchandise sold on Dangdang’s marketplace came from fashion apparel, says chief financial officer Zou Jun. Other popular categories include computers, electronics and baby and maternity.
Dangdang also reports that more than 10% of orders in 2013 came from mobile devices. The retailer says it plans to expand its mobile team in 2014.
The company projects its revenue will grow 30% in the first quarter of 2014 and that the gross merchandise value of sales on its marketplace will increase 100% from the same period a year ago.
For the fiscal year ended Dec. 31, 2013, Dangdang also reports:
- Net revenue increased 21.8% to 6.32 billion yuan ($1.04 billion).
- Net loss of 142.9 million yuan ($23.6 million),compared with a net loss of 443.9 million yuan in 2012.
For the fiscal fourth quarter ended Dec. 31, 2013, Dangdang reports:
- Net revenue increased 22.1% to 1.97 billion yuan ($325.7 million).
- Net income for the fourth quarter of 2013 was a 21.7 million yuan ($3.6 million), compared with a net loss of 122.1 million yuan in the fourth quarter of 2012.
The conversions between yuan to USD are numbers reported by Dangdang in its earnings release.