Fresh China gets $43m Series B led by IDG
Fresh China, a domestic fresh food retailer also known as Shengxian Chuanqi, has raised RMB300 million ($43.3 million) in a Series B round led by IDG Capital with participation from Sequoia Capital and BA Capital.
The company, which is now valued at RMB3 billion, was established in 2015 by Anhui province-based supermarket operator Letus. It received Series A funding in November of last year.
Fresh China operates 100 stores in Hefei, the capital city of Anhui. Fresh produce accounts for 80% of the items sold, with the rest being kitchen supplies. Each outlet covers around 240 square meters and offers 2,000 stock-keeping units (SKUs), generating average daily sales revenues of RMB30,000. Same-store sales growth has been 18% over the past two years, according to Wei Wang, Fresh China’s founder.
While many of its peers are primarily online operators, Fresh China is focused on offline expansion. It plans to open another 100 stores in 2019 and enlarge its footprint to include Nanjing. A new logistics center will be completed by the end of the year with a view to supporting this build-out. The company currently operates all its stores directly, but expansion is likely to involve franchising agreements with retailers in target markets.
Fresh China will also pilot home deliver services – guaranteeing delivery in 18 minutes to customers living within a certain radius of a store – and roll out a presale service for the 150,000 active subscribers to its app.
Competition in the fresh food retail space is fierce. Alibaba Group is a prominent player, having launched Hema Fresh, a 24-hour online and offline delivery service with more than 40 brick-and-mortar stores. JD.com has also rolled out an online fresh food channel as well as opening the 7Fresh supermarket in Beijing this year. It plans to add over 1,000 more such outlets in the next few years.
In terms of online operations, Tencent Holdings-backed Miss Fresh closed a $450 million funding round in September and is said to be expanding quickly. Imported fruit retailer Fruitday has received funding from JD.com alongside various VC investors, while KKR and Alibaba have committed capital to Yiguo, a fresh produce e-commerce platform.
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