ezbuy singapore acquisition
In this article
  • In a deal worth US$85.5 million, Chinese e-commerce platform LightInTheBox fully acquires Singapore-based ezbuy
  • One of the conditions for the acquisition includes co-founder and CEO of ezbuy, He Jian, to also hold the position as LightInTheBox’s CEO
  • We reached out to ezbuy to find out more about the acquisition and its plans moving forward

Back in August, we had the opportunity to interview ezbuy co-founder and CEO, Wendy Liu, on her journey so far; the transition from the original daigou (buying on behalf) model to its current multi-million-dollar e-commerce platform.

When asked what her plans were, she chose to leave us with a teaser telling us to “wait and see” and promised expansion to “new marketplaces”.

In about three months since we published the piece, it was announced that ezbuy would be fully acquired by China’s LightInTheBox (LITB) in a deal worth US$85.5 million (approximately S$117.6 million).

On 10 December (Monday), LITB officially closed the “strategic acquisition of a 100% equity stake in” ezbuy.

We took a look at the chain of events that led to the acquisition, and also reached out to ezbuy to find out more about the acquisition and what Singaporeans could expect from this deal.

Before we dive in, here’s a quick timeline of events leading up to the acquisition.

  • 30 October: LITB receives warning from the New York Stock Exchange (NYSE) to “cure deficiency” or be delisted
  • 8 November: LITB announces their “definitive agreement” to fully acquire ezbuy
  • 16 November: LITB announces board and management changes
  • 10 December: LITB officially closes acquisition of ezbuy

Merger Is Part Of Plan To Build And Scale B2C Cross-Border e-Commerce

ezbuy singapore acquisition
Image Credit: danviews.com

The Chinese e-commerce platform was founded in 2007 and is listed on the NYSE.

In a press release dated 8 November announcing the “definitive agreement to acquire” ezbuy, LITB said, “Both companies will work together to maximize business synergies created to capitalize on opportunities to expand their businesses.”

CEO of LITB Zhiping Qi at that time said in the statement, “This transaction is part of our larger plan to build our B2C cross border e-commerce out to scale globally by enhancing the user experience and improving supply chain management and fulfillment capabilities.”

Integrating our supply chain network, warehousing and logistics in China will create enormous business synergies that will truly unlock the value of the markets Ezbuy operates in and will help us build a solid platform for sustainable long-term growth,” he continued.

A brief browse through the product pages on LITB main site doesn’t show vendors’ names or brands, so it could be assumed that products are procured directly from manufacturers.

It’s a slightly different model from the marketplace model we’re familiar with at ezbuy.

Tech In Asia (TIA) affirmed that assumption, describing LITB’s model as sourcing “products directly from China-based manufacturers and sells them to online buyers around the globe”.

As the acquisition was underway, LITB on 16 November announced the resignation of its CEO Qi Zhiping which was part of the closing conditions for the acquisition.

If there was any drama involved, the release put it to rest immediately, stating that his resignation “was not due to any disagreement with the Company regarding its business, finances, accounting and/or any other affairs”.

Qi remains on LITB’s board as a director and has been appointed Vice Chairman of the Board.

Another condition for closing the acquisition included the appointment of ezbuy’s co-founder and CEO He Jian as LITB’s CEO.

“Struggling” To Prevent Itself From Delisting?

ezbuy singapore acquisition
Image Credit: CNN

This begs the question, what’s in it for LITB to have a CEO of a supposedly smaller e-commerce company based in Singapore, become the CEO of its New York-listed company?

In an email correspondence with Wendy, ezbuy’s CEO, we asked if there were any prior relationship with LITB before talks of the acquisition happened, to which she answered, “There was no close relationship with LITB before the acquisition.”

“Both companies shared similar values and recognised the potential of collaborating to achieve greater results together.”

One guess would be that LITB wants a share of Singapore’s billion-dollar e-commerce market and the instalment of He Jian is purely a matter of who’s a better leader.

Another guess could be that with the merger, ezbuy is looking to go up against Alibaba on its home ground by leveraging on LITB’s logistics network and resources, following the ‘scalping’ incident.

But is that all there is to it?

TIA noted that the deal happened in the midst of “an escalating ecommerce war that has seen Southeast Asian firms join forces with deep-pocketed players”, citing Alibaba-backed Lazada and Sea Group’s Shopee.

The acquisition of ezbuy comes “in the form of non-interest bearing one year convertible promissory notes” that are automatically converted into a number of shares if LITB’s shares “trade at a high of $3.85 for three consecutive trading days during the term of the note”, according to LITB’s earlier press release.

LITB may be obligated to offer an additional same number of shares “in a combination of cash and securities” if the price is not attained by the end of the one-year period.

In a statement released 30 October, LITB reported that it received a notice from the NYSE, “indicating that the Company is ‘below criteria‘ due to the average closing price of the Company’s ADSs being less than US$1.00 over a consecutive 30-trading-day period.”

To stay listed on the NYSE, the average closing share price of a listed company has to be “at least US$1.00 per share over any consecutive 30 trading-day period”, the statement read.

LITB was given six months “to cure the deficiency” and should the company not be able to meet the requirements, the NYSE will proceed with the suspension and delisting procedures.

TechCrunch described LITB as “struggling”, noting the shares were priced at $9.50 when it went public in 2013. On 10 December, its share price was at $0.64 and on 20 December, it rose to $1.25.

If this was any indication of LITB’s financial situation, it’s uncertain why ezbuy agreed to the acquisition.

Kr-Asia also reported that LITB’s share price “has been taking a tumble” and commented, “The company is not performing well on the stock market.”

In September this year, the company reported a gross profit of $14 million in Q2 2018, compared with $27.6 million in Q2 2017.

Their net revenues decreased 29.4% year-over-year to $55.4 million from $78.5 million in Q2 2017.

Their net loss was $9.5 million in Q2 2018, compared with a net loss of $1.8 million in Q2 2017.

The statement also read: “Net loss per American Depository Share (“ADS”) was $0.14 in the second quarter of 2018, compared with net loss per ADS of $0.03 in the same quarter of 2017. Each ADS represents two ordinary shares.”

LITB had cash and cash equivalents and restricted cash of $41.7 million as of 30 June 2018, the statement concluded.

So, could this acquisition simply just be a great, big effort to prevent LITB from delisting?

Why Acquire ezbuy?

ezbuy singapore acquisition
Co-founder and CEO of ezbuy Wendy Liu / Image Credit: ezbuy

With the full acquisition, LITB can incorporate 100% of ezbuy’s revenue into its own. Whether or not stock prices will rise, depend on market sentiments and investors’ confidence.

Based on what’s been reported lately, however, it seems like ezbuy is not doing as well as they seem.

Kr-Asia shared that “a number of hires” previously from Alibaba and Rocket Internet have left ezbuy “in a short amount of time”, and that ezbuy’s regional performance is lacking.

According to the Map of e-Commerce by iPrice, an e-commerce data comparison site, ezbuy fell one position, from third to fourth, between Q3 2017 and Q3 2018.

Monthly web visits for ezbuy reached 2.27 million in Q3 2017. One year later, the figure dropped by about 24%, to 1.73 million monthly web visits in Q3 2018.

In an article titled on TIA, “The curious acquisition of Ezbuy”, the writer believed that ezbuy “did not pivot fast enough”, that its expansion never went beyond the shores of Singapore, and that it can’t match the amount of money larger platforms are willing to burn to get market share.

But the article also highlighted ezbuy’s strengths like its cost-effective logistics and distribution systems, the “innovative” self-collection points set up in parts of Singapore, and its daigou model — if it can be scaled.

We shouldn’t discount the fact that they secured US$17.6 million in a Pre-Series C funding round earlier this year as well, bringing the total funds raised to just under $40 million, according to TechCrunch.

In an email correspondence with Wendy Liu, she said the acquisition “was a decision made after much thought and consideration for several months”.

She reiterated, “This acquisition is very significant as it strategically compliments to the business synergies of both ezbuy and LITB. Both companies are now able to combine the resources to enhance the customer experience and supply chain management further.”

“It has also allowed both companies to combine market access to more than 100 countries worldwide.”

When asked why ezbuy chose to be acquired by a “struggling” LITB, Wendy replied, “LITB is a well-established company with over ten years of operations and the first cross-border e-commerce company listed successfully on the NYSE.”

“The company has been through the ups and downs of the economic cycle, and they still have a strong presence in the market. Also, the major shareholders of LITB are the giant companies such as ZALL GROUP and AOKANG,” she continued.

These strong support (sic) clearly show the potential and value of LITB. We are very confident with the acquisition, ezbuy will be able to grow further together with LITB.

Make Buying Even Ez-er In The Future

ezbuy singapore acquisition
Image Credit: SingSaver

Post-acquisition, LITB released a report on their third quarter financial results.

Gross profit was $6.7 million in Q3 2018, compared with $26.6 million in the same period of 2017.

Net revenues fell 42.3% year-over-year to $44.5 million from $77.1 million in Q3 2017.

Net loss was $17.8 million in Q3 2018, compared with a net loss of $1.8 million in Q3 2017.

As for its ADSs, net loss per ADS was $0.27 in Q3 2018, compared with net loss per ADS of $0.03 in the same quarter of 2017.

According to Wendy, He Jian will be “serving double duty” as CEO of Ezbuy Holding Co., Ltd. and CEO of LightInTheBox Holding Co., Ltd.

She added that “both companies will operate separately” and there are no changes to the team and operations.

Wendy clarified that her position as the CEO of ezbuy in Singapore remains.

“In [the] long-term, both companies will be making strategic planning to integrate the resources including database, talents, sellers, technologies and logistics system. The integration will ultimately be benefiting the customers in term of wider product selections and greater savings,” Wendy said.

She confirmed that sellers and merchants on LITB will also be able to sell on ezbuy and that Singapore and Southeast Asian shoppers will be able to buy LITB products on ezbuy.

“ezbuy and LITB will share sellers resource. As a result of this arrangement, customers of ezbuy and LITB can enjoy more product varieties,” she added.

So, we reckon that nothing will change on the frontline; ezbuy customers will go on making those value-for-money purchases.

The TechCrunch writer forecasts that if both companies do manage to synergise, as they claim to be doing, and succeed in it, they could become a Pinduoduo in Southeast Asia.

Pinduoduo, a Chinese group-buy platform, has been heralded as the “fastest growing e-commerce app in China”, even beating Taobao when it came to app retention rate after seven days.

“We will continue realising our vision on bringing an extensive selection of products from the manufacturing countries in the most convenient and cost-saving way to the people living in the small and medium-sized countries,” Wendy stated.

“Buy global, locally. This vision has never changed since we started the company.”

Featured Image Credit: ezbuy

Subscribe to our newsletter

Stay updated with Vulcan Post weekly curated news and updates.


Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)

Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)