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Sinopec looking to forge ties with e-commerce firms

2014-03-18 13:19 China Daily Web Editor: qindexing

Joint enterprises to involve 'creative' petroleum retailing, the group says

Sinopec Group, China's largest oil refiner and distributor, welcomes different forms of cooperation with e-commerce companies in its petroleum retailing business which has huge potential, according to a company announcement on Monday.

"Sinopec welcomes both private and social capital to participate in the business of selling petroleum, providing better services for customers," said the company's official Weibo account, saying that the idea of e-commerce companies joining Sinopec's sales unit is "interesting and creative".

Lyu Dapeng, a spokesman for Sinopec, denied a rumor about cooperation between the State-owned oil giant and e-commerce giant Alibaba Group Holding Ltd, saying there was no further information to provide at the moment.

He told China Daily that room for cooperation with e-commerce companies is nonetheless huge.

After Sinopec announced in February its plan to open up to 30 percent of its multi-billion-dollar marketing arm to social and private investors, the rumor mill was abuzz regarding possible cooperation with a variety of companies.

Conjecture about Alibaba investing in Sinopec's sales business was so widely spread on Sunday that it prompted Yang Lei, public relations director of Alibaba, to issue a denial.

However, he said there remains a possibility of other forms of cooperation between the two that have yet to be clearly delineated.

Alibaba announced it had decided to hold its long-awaited initial public offerings in the United States.

According to Reuters, the Internet giant is now in discussions with six banks to underwrite the deal.

The company is reportedly expected to raise as much as $15 billion, which will rank it as one of the largest IPOs in the US.

It is not the first time that Sinopec has been connected with e-commerce.

The group started its exploration of e-commerce business in late 2012 when its subsidiary Sinopec Guangdong Oil Products Co launched an online oil purchasing platform and another non-oil online shopping website targeting vehicle owners.

In addition, Sinopec owns a shopping website - ejoy365 - which was launched on Jan 1, 2012. In addition to being offered cards to use when buying fuel, people can also purchase food, beverages, electronic appliances and car accessories on the site.

In recent years, the non-oil business of Sinopec has developed rapidly with revenue growth rising from 1.1 billion yuan ($178 million) in 2008 to 11 billion yuan approximately in 2012. However, the ejoy365 shopping website still has much room to improve in terms of its account service and customer retention.

On Feb 19, Sinopec announced a plan to seek social and private capital investment, which highlighted the country's endeavors to form a mixed ownership economy amid expectations of further opening-up.

The oil retail business sector that the company opened up to investors includes more than 30,532 fuel stations, pipelines and storage.

Liao Na, vice-president of Shanghai-based energy consultancy ICIS-C1 Energy, said the oil retail sector has been a stable and healthy business unit within the company, and therefore significant.

Zhu Ping, general manager of Sinopec Jiangsu Oilfield Co, said earlier this month that State-owned companies should focus more on core areas related to the security of national energy supplies and the macro economy. He added they should provide room for private companies to participate in other aspects of the business.

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