Beijing-based cross-border e-commerce platform Wandougongzhu, which focuses on Japanese-made products, has collected JPY 5.3 billion (USD 48.4 million) in a new financing round, 36Kr reported on Friday.
Japan-based internet banking giant SBI Holdings and Sugi Holdings, which sells pharmaceuticals, health food, and cosmetics, both participated in the round, along with XJ Holding, a cross-border investment vehicle of China’s finance conglomerate Citic Group. Existing investors such as Japan’s retail giant Itochu Corporation, carrier KDDI and SBI Holdings also joined.
The new funds will be used for operations, marketing, and team building, said the company.
Weng Yongbiao, founder and CEO of Wandougongzhu, which was set up in 2015, said to 36Kr that the company offers Japanese-made products to Chinese consumers via its app, while it also helps Japanese companies enter the Chinese market.
Wandougongzhu previously raised USD 68 million in a Series C round closed in November 2017.
The Wandougongzhu app has acquired more than 20 million registered users since it went live in September 2015, 60% of whom are less than 30 years old.
The app features more than 3,300 Japanese brands ranging from cosmetics to wine, and since the second half of last year, it has introduced over 70 less well-known labels to the Chinese market, such as Mama, Butter, and Style Up.
Wandougongzhu manages to team up directly with Japanese producers, an edge over rivals who can only team up with downstream distributors, the company says. Weng said that it took his firm two years to connect its IT and logistics systems with the Japanese suppliers.
The cross-border e-commerce market size between China and Japan is about RMB 120 billion, Weng said, citing Japan’s official data. He added that the company will continue focusing on the Japanese market to sharpen its edge, and will later consider entering the Southeast Asia market, but did not mention a specific timetable.
Chinese companies are confident about the future of China’s e-commerce market for imported goods, as announced by Alibaba after acquiring Kaola at USD 2 billion from gaming giant NetEase in September last year. In the first quarter of 2019, RMB 90.8 billion worth of imported goods were sold via retail e-commerce portals in China, up 10.6% year-on-year. Alibaba’s Tmall International platform took the largest market share at 32.3%, while Kaola followed with a 24.8% stake and Haitun Quanqiu, which was later renamed as JD International, secured a 17.4% share, according to research firm Analysis.
36Kr is KrASIA’s parent company