Online clothing retailer Vancl recently announced that it is expanding its operations as an online platform, giving more third-party merchants the opportunity to sell products through its website.

The company held a meeting with stakeholders in Shanghai this week to discuss the plan, which is part of its efforts to see 50 percent growth this year and achieve overall profitability.

While the move is in line with the overall trend toward open platforms in China's e-commerce industry, if not done correctly, Vancl runs the risk of squandering the strong brand name which has been the key to its success so far.

Vancl has in many ways been a pioneer in the Chinese e-commerce market. It has built up a brand that focuses on offering low-priced clothing to young, fashion-conscious consumers. It also developed its own delivery service that allows customers to try items on while the delivery person waits. These practices have been replicated across the industry, with e-commerce sites increasingly investing in their own delivery services and developing self-branded products. Only last year, the company's CEO, Chen Nian said he wanted Vancl to challenge Japanese retailer Uniqlo, which targets the same demographic and has a strong presence in major Chinese cities.

However, it hasn't all been smooth sailing for Vancl, which had to shelve its IPO plans in 2011 as an e-commerce price war raged and it struggled with logistics issues. The company shed staff, relocated much of its production to Bangladesh and, according to its CEO, has reduced warehouse item turnover from three months to 30 days.

Increasing the number of third-party sellers on its site will greatly help Vancl increase its profit margin over the long run. Indeed, this is the overwhelming trend in the e-commerce sector, as it allows e-commerce sites to reduce exposure to inventory costs and related risks, while broadening their product ranges.

But this trend is also leading to the homogenization of e-commerce - the more sellers they open to, the less distinguishable these platforms become with one another. Having more third-party sellers also hobbles their ability to conduct promotional activities, as platforms have to get individual sellers to agree to price cuts and other policies. They also have to take the time to vet these sellers and make sure they possess acceptable levels of quality and service, as any shortfalls will reflect badly on the platform's brand.

Vancl is also being challenged by offline brands which are getting wise and opening their own online sales sites, as well as storefronts on Tmall and rival open platforms. Then there is the cut-throat competition and pricing wars that are now synonymous with China's e-commerce sector, further cutting in to profits.

The success of Vancl has been built on its marketing savvy, but now it will need to carefully balance the need to expand its product range with the danger of losing the appealing image it has worked so hard to cultivate.

The author is a freelance writer based in Shanghai. Adam.skuse@yahoo.com