China's Suning raises $912m for e-commerce services arm

Other investors include a Shenzhen government guidance fund, Ningbo Xianshi Enterprise Management, SenseRobot Management, Central China Asset Management, an entity related to Ningbo Meishan Free Trade Port Zone, Softfir Capital and V Star Capital. Suning will remain the majority shareholder.

Founded in November 2020, Yunwang Wandian is Suning’s latest attempt to realize online-to-offline (O2O) integration. The company leverages its parent resources across supply chains, logistics and IT infrastructure to offer services to small and medium-sized offline merchants. These stretch all the way along the value chain, from transaction services to after-sales services.

As of December 2019, the company's in-house logistics operation comprised 12.1 square meters of warehousing and 25,881 express outlets. It also had 57 logistics bases in operation across 44 cities, with a further 18 under construction.

Suning's directly-owned offline stores will become customers of Yunwang Wandian. At the end of last year, the company owned 3,630 stores itself and had a franchisee network of more than 4,500 outlets. This includes Carrefour's China operation, which was acquired in 2019. Revenue came to RMB269.3 billion for the same year.

O2O integration is a key theme for China's internet giants. “Traditionally, e-commerce delivers products from a specific warehouse and it takes at least one day to fulfill the delivery. But intra-city retail takes local stores online. For example, you can order clothes from Zara, but instead delivering it from a suburban warehouse, it is sent from the branch closest to your home. You can receive it in 30 minutes,” said Albus Yu, head of retail at China Growth Capital.

Meituan-Dianping is one of the main innovators in intra-city retail, offering delivery services that cover takeaway food, medicine, flowers, and fresh produce. The company has a huge network of riders that are most active at peak dining hours handling food delivery orders. Intra-city retail services occupy the downtime.

Alibaba Group entered the food delivery space with its acquisition of Ele.me in 2018. In July, it announced a comprehensive platform upgrade, adding life services - which roughly equates to intra-city retail - to the food delivery offering. JD.com is also looking to speed up its supply chains, launching Wujing Tianze to connect the offline networks of retail brands with its online JD.com platform.

COVID-19 led to a spike in delivery demand, but that's not the only reason companies are investing in this area. They also want to accumulate additional consumer data, which can be used for cross-promotion.

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

• Topics
• Early-stage
• Greater China
• China
• e-commerce
• V Star Capital
• Shenzhen Capital Group