It’s proving a tough year for Chinese e-commerce verticals, with one struggling site having already exited at a low valuation, and many other specialist sites rumored to be in dire financial trouble. One such e-tailer is OKBuy, which sells only footwear. Rumors in the industry, as voiced by The Founder, are that OKBuy is losing senior executives and has run out of money. It’s believed to be seeking an acquisition by Tencent (HKG:0700), China’s biggest web company, which is also a previous investor in OKBuy.
The original article on The Founder went so far as to say that OKBuy was a hollowed out shell with few employees. But OKBuy’s CEO, Li Shubin (pictured), fired back on his personal Weibo page (see here) that the site has “over 700 employees” right now. However, he didn’t address the stories of exec defections, a lack of operating cash, or if the company was negotiating with Tencent.
OKBuy's Li Shubin (Image: news.cnblogs.com)
OKBuy’s massive series C round in June 2011 saw Tencent invest as much as $50 million in the footwear specialist site; DFJ also participated in that round, but the total input was never revealed.
While Tencent is pushing hard into e-commerce these days with its B2B2C online mall QQ Buy, which launched last October, it’s not assured that the web giant will come to the rescue of its investment. If OKBuy is acquired, it’d make a better fit into Tencent’s 51Buy.com site, which is more of an Amazon-meets-Zappos kind of B2C site.
Earlier this summer we’ve seen the once-promising Redbaby site cheat death by getting acquired by Suning – while others like clothing e-tailer Masa Maso are thought to be in danger, stuck on the same (slowly sinking) boat.
[Source: Marbridge]
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