China second-hand luxury goods platform Ponhu raises $45m
Ponhu, a China-based second-hand goods trading platform specialising in the luxury segment, has raised USD 45m in an extended Series C round led by Hedgestone Capital.
Jinhuifeng Investment also came in as a new investor, while Ince Capital Partners re-upped.
Ponhu claims that its valuation has doubled since its last round - a USD 50m Series C led by Focustar Capital and ATM Capital. This followed a CNY 175m (USD 28m) Series B in May 2020, with Fortune Venture Capital and Ince in the lead.
Founded in 2015, Ponhu initially served as a C2C matching platform for buyers and sellers. It provided a one-stop service, including the appraisal and valuation of goods as well as maintenance and repairs.
The company subsequently switched to a C2B model, acquiring items from consumers and then distributing via a network of 5,000 small merchants, some of them WeChat stores.
Ponhu has developed an algorithm to identify popular items and define the prices accordingly. Its claims that algorithms, rather than purchasing officers, determine the price of 90% of products sold. This has become the basis for large volumes and fast turnover.
In 2020, Ponhu started selling directly to end-consumers through its app and WeChat mini-program. It has already attracted more than one million end customers. Last November, the company opened its first offline store in Beijing. Part of the proceeds of the new round will go towards opening additional stores.
Another new initiative is supporting or incubating domestic brands. Cheng Ma, Ponhu's founder, believes the coming three to five years will be seen as a golden for Chinese fashion brands, which will pose a formidable challenge to their foreign peers.
Global luxury goods sales grew by 13-15% in 2021, according to a Bain & Company. China maintained double-digit growth and accounted for about 20% of the global consumption. The market was expected to be worth nearly CNY 471bn in 2021.
Bain projects that China will become the world's largest luxury goods market by 2025.
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