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VIPSHOP Founded by Wenzhou Merchants Gets Listed on NYSE

VIPSHOP founded by wenzhou merchants gets listed on nyse

On March 23, 2012, Shen Ya and Hong Xiaobo, two Wenzhou merchants, rang the opening bell at the New York Stock Exchange to celebrate the successful IPO of vipshop.com, an online discount retailer founded by them. In its American debut, the shares opened at USD 5.99, a 7.8% fall compared with its offering price USD 6.5 per share. VIPSHOP, whose value reached USD 292 million according to the opening price, raised USD 72.64 million through its IPO. Traded under the symbol of VIPS, the company became the first Chinese company to list in the United Stated in 2012.

Founded in Guangzhou in August, 2008, VIPSHOP operates through flash sales combining online discount retail of branded products and sales of a finite quantity of products for a limited period of time on its website. It offers consumers popular branded products at deeply discounted prices, including costume, cosmetics, bags, perfume and accessories etc.

Shen Ya and Hong Xiaopo, the co-founders of VIPSHOP, are Wenzhou merchants who have many years’ experience in the traditional trade without any previous career in the e-commerce and the Internet industry. Shen Ya, chairman of the board of directors and CEO. And Hong Xiaobo, vice chairman, own a 23.6% stake and an 18.2% stake in the company respectively. Meanwhile, two other Wenzhou businessmen, Peng Xing, president of Wenzhou-based Fapai Group, and Xu Yu, are also on the list of shareholders of the company as angel investors.

Since last August, Chinese companies have been shut out of the US market because of accounting scandals and frauds, leading to a great drop of both the stock price and the market value of those US-listed Chinese companies. At the same time, new IPOs of Chinese companies in the United States have also stalled, especially those e-commerce companies. The successful IPO of VIPSHOP is seen as an indicator for other Chinese companies going public in the United States. It takes only 3 years and 7 months from its inception to its IPO. However, insiders believe that the confidence in Chinese companies has not recovered yet in the US market and investors still remain skeptical and cautious.

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