Tencent leads $297m Series B for China fresh food retailer
Yipinshengxian, a China-based fresh food discount supermarket operator, has raised RMB2 billion ($297 million) in a Series B round of funding led by Tencent Holdings.
Other participants include existing investor Capital Today, as well as East Bell Venture Capital and Longzhu Capital, the investment arm of Meituan-Dianping. According to a statement, the fresh funding will be used to expand offline coverage, build out the logistics and supply chain, and set up a smart online retail system that uses artificial intelligence.
Founded in 2017, Yipinshengxian provides discount fresh foods, including vegetables, fruits, snacks, meat via around-the-clock stores in more than a dozen cities across China. It also offers food processing services at the stores, which are located near residential buildings or inside shopping malls. A mobile app allows customers to make online orders that can be picked up or home delivered.
Xin Xu, the founder at Capital Today, said that during the past two years, revenue has tripled and that Yipinshengxian has expanded into 11 cities. The company aims to increase its portfolio of stores to 1,000 this year through a franchising model.
China’s fresh food retailing market is estimated to be worth RMB4 trillion, more than 70% of which is serviced by traditional agricultural markets. The sector has consequently become a battleground for e-commerce players looking to improve user experience and investors targeting trends around increasing disposable income among consumers who would prefer fresher and healthier foods.
Competitors with a similar mix of physical stores and online operations include Alibaba Group-backed Hema Fresh. However, a number of O2O models have emerged, including fresh food sections set up on traditional e-commerce sites such as JD.com; apps dedicated to selling online such as Tiantianguoyuan; and operations that trade across both community stores and portals such as Tencent-backed Miss Fresh.
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