Acquity Group eyes China market

Updated: 2012-04-30 11:17

By Ariel Tung in New York (China Daily)

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Drawn by the growth potential of China's e-commerce marketplace, Chicago-based Acquity Group is looking for funding to help expand its China business with a listing on the New York Stock Exchange on April 27.

The e-commerce brand consulting firm plans to invest $10 million of its initial public offering proceeds in the China market, according to its filing.

Founded in 2001, Acquity has 10 offices in the United States and three offices in China - Shanghai, Beijing and Hong Kong. It provides digital marketing and e-commerce services to more than 500 companies including American Airlines, American Express and Cadillac.

The company helps its clients enhance their Internet and social media presence, design e-commerce websites or improve their existing ones using Acquity's technologies.

In November last year, Acquity launched a new practice that focuses on extending and penetrating brands into the China consumer market.

"With Chinese consumers showing a preference for foreign brands, the country is quickly emerging as the biggest consumer market in the world," said Christopher Dalton, Acquity's CEO and co-founder.

More recently, Acquity entered into joint ventures with two Chinese firms relating to the sportswear market.

"As part of our China strategy, we have focused on building our presence and capabilities in the sportswear market," Acquity's filing read.

The company entered a joint venture relating to k121.com, a leading Internet retailing website for sportswear products in China selling brands such as Nike, Adidas and Kappa. Dalton said the company plans to introduce other global sports brands to Chinese consumers through this platform.

"Numerous US brands have trusted us for 11 years to help them be successful in the US market. This gives them the opportunity to sell to Chinese consumers," Dalton told China Daily.

In December last year, Acquity entered into an agreement with Li-Ning, a leading sportswear brand founded by Chinese Olympic medal-winning gymnast Li Ning, to launch its shoe and sports apparel in the US market.

The initiative, called Digital Li-Ning, includes launching an e-commerce website and developing new apparel for the US market to be sold exclusively online. The $10 million startup investment will initially focus on the US.

"The launch of Digital Li-Ning not only marks the first time that a major Chinese brand has penetrated the US market, but also marks a milestone for Acquity Group as we continue to support leading brands that are expanding overseas," Dalton said at the time.

E-commerce businesses in China have a reason to believe that brighter days lie ahead. Recent reports indicate that China's e-commerce market is one of the largest and fastest growing in the world.

Online sales in China last year grew 66 percent from 2010, with turnover totaling $125 billion (780 billion yuan), according to a report by Chinese news agency Xinhua. A China Internet Network Information Center report in January said there were 505 million Internet users in the country as of November 2011, exceeding the entire population of the US.

A recent study conducted by Acquity showed that 45 percent of China's online shoppers purchase something online at least once a week, with 44 percent buying something online between one and three times every month.

China's potential to become a leading global e-commerce marketplace is fueled by the Chinese government's e-commerce 12th Five-Year Plan. According to a recent report released by China's Ministry of Industry and Information Technology, the country aims to increase the value of its e-commerce sales to $2.86 trillion by the end of 2015.

According to Acquity's IPO filling, the company's revenue increased 47 percent in 2011, to $106.7 million from $72.6 million in 2010.

In spite of the company's enthusiasm for the China market, its first-day trading met with a lukewarm reception. After pricing its 5.6 million American depositary shares below its expected $8 to $10 range, Acquity's stock traded at $6 and ended at $5.75 when the market closed on April 27.

atung@chinadailyusa.com

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