LightInTheBox’s growth has slowed
significantly as the company, which relies heavily on one product category, is
feeling the heat of the competition. Although business has shown improvements
in profitability but it could struggle with margins in the future.
China is the
manufacturing hub of the world but there aren't a large number of Chinese
companies that can be considered a global retailer of Chinese products.
However, a small Chinese e-commerce company listed at the NYSE with a market
cap of $367 million is trying to do just that. LightInTheBox (LITB) is a
six-and-a-half year old online retailer from China, which delivers products to
consumers around the world. The company operates primarily through 2 websites; www.lightinthebox.com and www.miniinthebox.com, which offer a
wide variety of lifestyle products at attractive prices. Its websites can be
viewed in 27 different languages and are available to more than 80% of the
global internet population.
LightInTheBox has become the biggest China-based
online retailer, which sells third party products, in terms of revenues
generated from outside of China.
LightInTheBox
came to NYSE in June and was the first Chinese
IPO of 2013 after YY's (YY) offering in November.
Recently, Chinese companies have shied away from the U.S. markets due to
allegations by short-seller firms, such as Muddy Waters.
The company's
shares rose 16% in June and continued to rise until mid-August. Then in late
August, LightInTheBox was hit with several lawsuits from its investors (such as here, here and here)
as its shares plummeted by 40% following earnings, eliminating all gains made
in the prior months. In the lawsuit, the investors claimed that LightInTheBox
and its management led investors to believe that its growth prospects were at
extraordinary levels when in reality, they were not.
