CITIC joins $34m round for Japanese e-commerce platform

SBI Investment and SBI Securities also took part in the round, which includes some debt financing.

The CITIC commitment came from CITIC Capital Holdings, the parent company of the eponymous private equity business. CITIC Capital has a dedicated Japan arm that targets local companies with strong China growth prospects - currently deploying its third Japan fund - but it follows a buyout strategy, so Reclo wasn't applicable.

Over half of Reclo’s sales come from more than 200 overseas markets and China is responsible for 70% of the total. The company is looking to China to underpin a global expansion strategy. A Chinese language version of the platform launched in 2016 and a local subsidiary was established last year.

Reclo’s bullishness is based on the low penetration of second-hand luxury sales in China. Sales of new goods reached JPY11 trillion last year, nearly one-third of the global total. However, the market for used products is only 1.4% of that figure, compared to 20% in developed economies, the company said in a statement.

Prospective customers send unwanted luxury items to Reclo for professional appraisal. If they are happy with the valuation assessment, they can sell the items through the platform, with Reclo receiving a cut of the proceeds for handling the marketing, transaction processing, payment and shipment functions. The company also acquires items directly from fashion retailers. Expansion plans include sourcing from Chinese customers as well as selling to them.

Japan accounts for 45% of sales, with 20% coming through the Reclo platform and the rest through third-party e-commerce sites. The company primarily uses eBay in Europe and the Americas, Reebonz in Southeast Asia and VIP Plaza in Australia, while Alibaba Group’s Taobao service, Tencent Holdings’ WeChat platform, JD.com, and Mei.com are the major Chinese partners.

“Active Sonar stands out from the traditional second-hand goods businesses by making full use of mobile platforms and collaborating with large global companies. By specializing in high-value branded products and offering expert guarantees from experienced Japanese appraisers, it is developing a reliable platform that is safe and secure for buyers and sellers,” SBI Investment said.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• Greater China
• Expansion
• Consumer
• Technology
• Japan
• China
• CITIC Capital
• TMT
• e-commerce