By Gillian Wong And Prudence Ho 

BEIJING--A Chinese e-commerce services firm backed by Alibaba Group raised a lower-than-expected $110 million in a New York initial public offering on Thursday, in a potential sign of skepticism from U.S. investors about Chinese Internet stocks.

The offering marks only the second in the U.S. by a Chinese company this year after last year's boom, which included Alibaba Group Holding Ltd.'s blockbuster $25 billion offering. Bankers said the slowdown reflects the rising amount of private-funding alternatives available to Chinese startups.

Shanghai-based Baozun Inc. wants to raise money to fuel efforts to ride what it expects will be a surge in Chinese demand for branded goods online. The firm helps international brands such as Philips NV, Nike Inc. and Microsoft Corp. develop websites and digital marketing for their storefronts on shopping platforms such as Alibaba's Tmall and rival JD.com Inc., as well as their own online stores. It also handles customer service, logistics and warehousing. It says it has a 20% share of its market by transaction value.

Baozun Chief Executive Officer Vincent Qiu said the deal was well received by investors during the roadshow and that the stock's pricing was arrived at to better benefit investors. "We plan to be around for a long, long time, and we think if we keep executing our strategy in such a rapidly growing market, the share price will take care of itself," he said.

The company, founded in 2007, has its sights set on the burgeoning market of brands selling to Chinese consumers over the Internet, which is expected to grow from $129 billion last year to $379 billion in 2017, according to a report by market research firm iResearch Consulting Group commissioned by Baozun.

Baozun sold 11 million American depositary shares at US$10 each, lower than its indicative price range of US$12-US$14. Shares recently were at $10.15, up 1.5% from the offer price in their Thursday morning debut on the Nasdaq Stock Market.

Baozun's stock pricing could reflect broader worries about the Chinese economy, said Hunter Williams, an associate partner with OC&C Strategy Consultants in Shanghai. "There's a lot of concern about a China slowdown and a crazy stock-market situation. I suspect that there's a lot of concern that good times are not going to last."

It could also indicate that investors see it as closely associated with Alibaba, he said, which has faced challenges in recent months with concerns about counterfeit goods on its platforms. Alibaba's stock has fallen 25% from its November peak, though still trades above its offer price. Alibaba declined to comment.

Baozun is only the second Chinese Internet company to list in the U.S. this year, after an April offering by Wowo Ltd., which operates an online sales platform. This appears to signal a slowdown from last year, when many Chinese Internet firms launched U.S. IPOs, including Alibaba, JD.com, social media platform Weibo Corp., online cosmetics retailer Jumei International Holding Ltd. and Chinese dating app Momo Inc.

Bankers say that Chinese interest in U.S. listings has waned as Internet companies find they can get higher valuations in the private market. Chinese technology startups are seeing record amounts of cash going into them as hedge funds and wealthy individuals chase technology-related assets. For example, smartphone maker Xiaomi Corp. raised more than $1 billion in a private funding round in December that valued it at over $45 billion.

Still, Baozun decided to list in the U.S. because the bulk of its clients are international brands and the company thinks it is a way to raise their profile and attract institutional investors, Mr. Qiu said. "We are about to be more visible to potential brands here (in the U.S.), we are quite excited about it."

Baozun reported a net loss of $9.6 million on total revenue of $255 million last year, largely due to stock awards to employees. The company made $1.2 million in first-quarter profit, roughly double the amount in the year-earlier period, according to the prospectus.

But revenue growth had also slowed last year, which Mr. Qiu said was because Baozun stopped working for low-margin personal computer brands from which it was difficult to generate profits.

Morgan Stanley, Credit Suisse and Bank of America Merrill Lynch are underwriting the IPO, according to the company's regulatory filings. Alibaba is the company's largest shareholder, with a 23.5% stake held by its subsidiary Alibaba Investment Ltd. before the offering.

Write to Gillian Wong at gillian.wong@wsj.com and Prudence Ho at prudence.ho@wsj.com

Access Investor Kit for Royal Philips NV

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=NL0000009538

Access Investor Kit for Royal Philips NV

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US5004723038

Access Investor Kit for NIKE, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US6541061031

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Nike (NYSE:NKE)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Nike Charts.
Nike (NYSE:NKE)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Nike Charts.