Facebook ads’ return on ad spend rose 33% year over year, while purchase rates jumped 68%.
The value of goods sold via Dangdang’s marketplace rises 103% as the one-time online bookstore becomes a mass merchant.
Chinese online retailer and marketplace operator Dangdang Inc. had a successful first quarter. Dangdang, No. 10 in the Internet Retailer China 500, which got its start selling books online, since last year has been expanding its categories by allowing other retailers to sell on its site. The retailer’s shares trade on the New York Stock Exchange and the company’s market value is currently $802 million.
“We continue to make good progress in transforming Dangdang from an online bookstore into an integrated online shopping mall with prominent destination categories,” says Peggy Yu Yu, executive chairwoman of e-commerce for China Dangdang. “Combined general merchandise sales of 1.7 billion yuan ($270 million) from both principal business and marketplace surpassed books and media for the sixth consecutive quarter, growing at a rate of 71% year-over-year. Apparel accounted for nearly half of marketplace (sales volume) and continued to outpace the growth of the overall marketplace.”
For the first quarter ended March 31, 2014 Dangdang reports:
- Net revenue of $279.2 million up 30% from $214.7 million in Q1 2013
- The value of merchandise sold on Dangdang’s marketplace rose 103% to $190.8 million from $94.0 million.
- Gross margin was 18.2%, compared to 17.2% in the first quarter of 2013 and 17.6% in the fourth quarter of 2013.
- Net income of $300,000, compared with a net loss of $11.66 million in the first quarter in 2013.
- Dangdang had approximately 8.6 million active customers in Q1, including approximately 2.8 million new customers acquired in the quarter, up 16% and 17% respectively from Q1 2013.
- Total orders of 16.40 million, up 11% from 14.77 million a year earlier.
- Fulfillment expenses, which include warehousing and shipping expenses, of $27.5 million, representing 9.8% of total net revenue, compared to 13.8% in Q1 2013. The year-over-year decrease in fulfilment expenses as a percentage of revenue is primarily due to more efficient warehouse operation and lower shipping costs, Dangdang says.
- Marketing expenses of $10.8 million, representing 3.9% of total net revenue, compared to 3.2% in Q1 2013. The year-over-year increase in marketing expenses as a percentage of revenue is due to increased investment in marketing programs to build awareness of Dangdang’s fashion and apparel categories, the company says.
- Technology and content expenses of $7.0 million, representing 2.5% of total net revenue, compared to 3.7% Q1 2013.The year-over-year decrease in technology and content expenses as a percentage of total net revenue is in part a result of a reduction in I.T. workers, Dangdang says.
Dangdang expects total net revenue in the second quarter to reach $311.44 million, representing year-over-year growth of around 30%. It expects the value of goods sold through its marketplace to grow 80% year-over-year in Q2.
In March another Chinese e-retailer, Yihaodian, which operates Yhd.com, and Dangdang.com agreed to open storefronts on one another’s sites. Yihaodian said it will sell groceries from its Dangdang storefront, while Dangdang.com will sell books on Yhd.com.