Chinese smart retail services provider raises $100m

Chinese artificial intelligence (AI) company Face++, which has received substantial PE backing, came into the round as a strategic investor. A South Korean consortium led by SBl Investment Korea also participated.

The fresh capital will go towards system upgrades as well as increasing the number of Good Neighbors stores and improving current locations. Face++, which launched an AI research institute with the company in May, will continue to offer input on developing digital solutions for retailers, according to a statement.

Founded in 2014, Xianlife was originally a cross-border e-commerce platform but later transformed into a smart retail solutions provider. It helps convenience stores adopt technologies that enable facial recognition, self-checkout, and unmanned shelves. It also allows stores to collect and analyze customer data with a view to improving product offerings and assists with supply chain optimization and promotion on major e-commerce sites.

Beijing-based Good Neighbors was acquired in October 2017 as a testing ground for these solutions. Greentown Property Service Group and Alibaba Group-backed online fresh produce retailer Yiguo also took part in the $84 million deal. Xianlife holds a 50% stake in Good Neighbors, while Greentown and Yiguo hold 35% and 15%, respectively.

Xianlife claims that Good Neighbours has achieved a 350% increase in average per store sales volume since the acquisition. It plans to open 1,000 outlets in the next three years. At present, there are around 300 stores in Beijing and Hangzhou. Xianlife also collaborates with convenience store chains such as Ledoujia, Youke, and Lucheng.

“The systems of Japanese and other international store chains, while delivering high operational efficiency, require a massive budget to develop. This means they are not as suitable as our product in meeting demand among China's rapidly developing local convenience store chains,” said Hongtao Song, president of Xianlife. Song previously worked as China general manager of Family Mart, a Japanese convenience store chain.

Prior to this round, Xianlife raised RMB30 million in seed funding in 2014 followed by a $10 million in Series A led by Bertelsmann Asia Investments and CDH Investments two years later. In 2017, the same investors contributed a further $5 million in an extended Series A alongside Cherubic Ventures and Hong Kong-listed developer Modern Land.

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• Topics
• Greater China
• Consumer
• Expansion
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• China
• TMT
• artificial intelligence
• Consumer