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Fanli mulls China IPO, aims for 100 billion yuan of online trading

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Fanli.com, a Shanghai-based directory for online shopping funded by Walt Disney's Steamboat Ventures, said it is considering an initial public offering on China's A-shares market.

"The accelerated IPO pace in China heightened our hopes for a share sale at home," said the company's founder and chief executive Gary Ge Yongchang, in an interview with the South China Morning Post.

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A domestic listing could help the Shanghai-based company with its target to more than triple the transaction value on its online platform to 100 billion yuan (US$14.5 billion) by 2020. Founded in 2006, Fanli earns a commission by directing shoppers to reputable online stores, and using cashback rebates to attract them.

Among a dozen of so-called Chinese unicorns, or privately held technology firms surpassing US$1 billion in valuations, Fanli (返利) claims to have about 140 million customers, spending 30 billion yuan on its platform last year, a 40 per cent growth from 2015.

Three of China's largest internet technology companies – Tencent Holdings, Alibaba Group Holdings and Baidu – have all chosen the US as the market for raising their capital.

That is a trend the Chinese market regulator is trying to change, as it offers incentives and fast-track procedures to attract Ant Financial, Zhong An Online Property & Casualty Insurance and other technology companies to list on either the Shanghai or Shenzhen exchanges.

Fanli, named by Deloitte as one of China's top high-growth technology firms, earned nearly three billion yuan in 2016 revenue, or about 10 per cent of the total transaction value, Ge said, adding that the company is profitable.

"When people go shopping, value for money is always their goal since they want to find the best products at the lowest prices," said Ge. "We aim to expand our businesses to better tap the vast consumer market."

Fanli raised more than US$100 million of capital from investors such as Steamboat and Japanese internet retailer Rakuten.

Ge, 36, said the company will focus on integrating its online and offline businesses to vie for a bigger share of China's massive consumer market.

It has launched a service that allows users to enjoy cashback rebates from physical stores.

Shoppers who display the QR code of Fanli's app to cashiers can receive rebates on their purchases, a benefit which is now available at 10,000 stores this year, Ge said.

It will also launch the haitao (海掏) business – cross-border online shopping by mainland consumers – in April by partnering with retail giants such as Amazon.com and Wal-Mart Stores.

Fanli also has a tie-up with the mainland's top e-tailers such as Alibaba's Taobao and JD.com to help online shops promote their products.

"Our role in the e-commerce sector is to provide accurate marketing for retailers seeking to reach their target customers and help customers find the best products," Ge said. "We have the technology that makes us well received by both buyers and sellers."

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