FountainVest leads $100m round for China's Ushopal

Cathay Capital, Zhongyuan Capital, Hengxu Capital and Dazhong Zhongsong Fund also took part in the round.

According to AVCJ Research’s records, DL Capitals Angel Fund and Integral Partner Group provided pre-Series A funding in 2015 and then Cathay joined them for a RMB10 million ($1.5 million) Series A in a year later. In 2018, Younger Group – a leading domestic textiles and apparel player – led a RMB200 million Series B round, with participation from Cathay and other investors.

Cathay claims to be Ushopal’s earliest investor, having identified it during a search for companies that could craft and execute China entry strategies for niche foreign brands with local appeal. It committed $10-20 million across three rounds, taking an initial stake of 10% and growing it to 20%.

Lu Guo, Ushopal’s founder, previously worked on Asia Pacific strategy for VF Corporation where she developed China marketing strategies for the likes of Vans, Timberland, and The North Face. Guo then moved on to Johnson & Johnson in 2015, which was where she got the idea for Ushopal.

“I realized that in the health, beauty, and mother and baby space, the majority of brands still operated as a small counter, or 100% wholesale model, and the go-to-market capability was much less agile,” Guo told AVCJ in a 2018 interview. “At the same time, Chinese consumers are going through an upward trend in these sectors. They’re looking for brands with higher quality and heritage backing them, rather than general mass brands.”

Ushopal’s gross merchandise value (GMV) surpassed $200 million last year. Its portfolio includes brands exclusively sold at high-end retail outlets in Europe and the US that have scaled through online channels in China, among them beauty players Natura Bisse, Juliette Has a Gun, and Chantecaille. Cathay leveraged its Sino-French heritage to connect the company to French brands, leading to deals for exclusive online marketing rights in China.

Ushopal’s toolkit includes more than 2,500 online influencers, an in-house content studio, branding and omnichannel growth teams, logistics capabilities, and a division dedicated to generating sales through Alibaba Group’s Tmall platform. It also owns Bonnie & Clyde, which operates five brick-and-mortar stores in Shanghai that serve as brand showcases. Average transaction value exceeds RMB5,000. Goals for 2021 include entering new markets and expanding to 11 stores.

The company takes a data-centric approach to ensure that clients with relatively limited buying power make an impact. In product promotion, for example, it analyzes livestreaming platforms and video sites, determines which ones deliver the most purchases, and directs online influencers accordingly. Data analytics expertise also allows Ushopal to set prices more efficiently in online and offline retail channels and see how consumers respond in real-time.

"With this round of financing, the already cash-flexible Ushopal will be even more equipped to invest in its portfolio, and Bonnie & Clyde experience centers,” Guo said in a statement. “The Ushopal leadership team has many years of brand-building and omnichannel-building experience, making it uniquely positioned to fuse storytelling and knowhow to build up superbly differentiated niche luxury beauty brands into category leaders in China.”

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• Topics
• Greater China
• Consumer
• Technology
• Expansion
• China
• TMT
• Fountainvest Partners
• Cathay Capital Private Equity