Report by China News on April 24, 2018 - On April 23, the domestic leading Social E-commerce Yunji announced its completion of Series B financing of USD$120mn. CDH Investments led this round of financing and Huaxing Capital Partners and other funds made co-investment. THCapital acted as the exclusive financial advisor of the financing.

Xiao Shanglve, Founder and CEO of Yunji disclosed through social media on that day that this round of financing would be used to further integrate the upstream supply chain, improve AI big data infrastructure and enhance logistics & warehousing capacity of each region, empower more small and micro startups in the social e-commerce field so as to create more social values. 

△Xiao Shanglve, Founder and CEO of Yunji

As a pioneer of social e-commerce, Yunji officially went live on May 2015. Yunji integrates the commodity supply chain, logistics, IT, customer service and other resources and opens them to shop keepers to realize cloud resource sharing. The key to the rapid rise of Yunji is to endlessly minimize the cost of shop keepers by enabling industrial chain and social crowdsourcing promotion traffic. 

"On April 20, Yunji sold nearly 1.7 million steamed stuffed buns (more than one RMB yuan each) within only half a day. Xiao Shanglve disclosed to media that Yunji helped more than 3 million people to start e-commerce retailing, had nearly 30 million VIP users and achieved daily sales of RMB278 million. In the whole year of 2017, Yunji’s annual sales volume exceeded RMB10 billion and it paid tax of more than RMB150 million in accumulative total.

● The shortest “Heart Distance” between brand and consumers

Wang Liang, Vice President of Luolai Home Textile Co., Ltd. disclosed that Luolai sold products worth of over RMB12 million within 12 hours on April 20 through Yunji’s platform, and then “it was a shame that the sales ended because we were out of stock.” Wang Liang said that similar super brand day on other E-commerce platforms need several hundred SKUs, but Luolai achieved more than RMB10 million sales with only 25 SKUs on April 20. This enables businesses to focus more on strict quality control and bring more benefits to consumers and businesses can get bigger profit margins.

Wang Liang believes that Yunji adopts the most advanced Internet technology and social networking platform to create a "shortest distance between the hearts of brands and consumers", which is the unique value chain of Junji.

Before the super brand day, Luolai received 30 Yunji shop keepers. They carefully investigated the lab and stock house of Luolai, talked with its workers and even inspected the commodities to be sold together with buyers from Yunji one by one, kept samples for each commodity, inspected the stock and spared no efforts to release the whole process transparently and unimpededly on social platforms. After seeing the expertise and enthusiasm of shopkeepers of Yunji, Wang Liang said he was not surprised by the amazing sales results Luolai achieved in the end.

According to data from Yunji, it established strategic cooperation with dozens of domestic and overseas premium brands in 2017, such as Colgate, L'Oreal,, Johnson & Johnson, LG, Mediheal, Mariedalgar, Tomatopie, Yili, Anchor, Shengmu, Be&Cheery, Swisse, Philips, Jiuyang, Shuixing Home Textile, Ecovacs, BONAS, Intercos, Proya, Chicmax and so forth.

● Create more business opportunities for everyman

Ying Wei, partner of CDH Investments believes that the total volume of retail sales of commodities in China grows at 10-12% per year, of which E-commerce new retailing will account for about 20% this year. In contrast, the share of traditional retailing is declining, and the growth rate of traditional e-commerce is further falling. 

In this context, CDH Investments mainly focuses on “new species” in the field of e-commerce, especially those new e-commerce platforms that can give better user experience. 

According to Ying Wei, after completed due diligence about Yunji, CDH Investments believed that if the first top two e-commerce platforms started a revolution to wipe out one hundred thousand commercial streets, Yunji will be a reverse revolution. Those ordinary purchasing guides who lost their opportunities and competitiveness in one hundred thousand commercial streets get access to new career opportunities through a platform like Yunji, so the mode of Yunji gives them a fresh experience.

Xiao Shanglve said that the reason why Yunji could achieve such a rapid and stable growth was closely related to its target user base and target market. 

He thought that the shopkeepers of Yunji were composed of three groups. The first group is small and medium distribution sellers that lose competitive advantage of price and logistics after the trend that brands are directly sold through the whole channel of e-commerce platforms. The second group includes tens of thousands of shopping guides of traditional supermarkets. The third group is 54 million “mothers”.

Xiao Shanglve estimated that the scale of the target groups above covered 7-8 million people. In fact, these groups are the great entrance to the family consumption of China. Although opportunities and wealth are moving to elite class more and more rapidly, the ordinary consumption group is still the corner stone of the explosive power of domestic consumption. Currently, Yunji has more than 3 million shopkeepers. Within just 3 years, Yunji has provided part-time jobs for 3 million people, so its market size has a bright prospect in the future.

● Technology drives thousands of households to upgrade their consumption

Currently, the number of individual shopkeepers of Yunji is equivalent to the number of shops of 2,000 large commercial complexes. And the number of its VIP members is equivalent to the population of Australia and the number of packages delivered per year is enough to make all households of the Tier 1 cities of Beijing, Shanghai and Guangzhou receive packages for over 4 times.

Xiao Shanglve disclosed that the ratio of sales return and refunding of Yunji platform is less than 2%, ranking top among the peers. The platform has nearly 30 million VIP members, of which 75% are female members. The members from Tier 1 and Tier 2 cities accounts for 45% of the total while the members from Tier 3 and Tier 4 accounts for 55%, but those members from Tier 3 and Tier 4 cities have higher liveness. The platform does not pursue too many SKUs, but to choose the most competitive SKU of each brand. To this end, Yunji has developed a "Three 500" plan, that is, to choose 500 mainstream brands, 500 innovative brands and 500 premium plants. Through strategic cooperation with mainstream brands, enabling and training innovative brands and upgrading and aiding premium plants, Yunji will provide abundant diverse and high cost-effective commodities and services.

Currently, Yunji has set up nearly 30 self-operated warehouses in Beijing, Wuhan, Wuxi, Xi'an, Jiaxing, Hangzhou, Guangzhou and other places and built a customer service base in Hefei.  At the same time, Yunji has worked together with EMS, SF, YTO Express, STO Express, ZTO Express and Yunda Express to provide express delivery service on the same day or the next day. Yunji has the ability to deliver goods with nearly 100 warehouses at the same time. In the peak period of December 12 in 2017, Yunji delivered all the 184 orders in the same day. 

Data show that China currently has 18 million additional people each year. Mothers will spend 3 years in raising newborns. If calculated based on 1 year, it is equivalent to produce 54 million women in childbearing age per year. Internet viewers believe that the time of women in childbearing age is fragmented by her families and children. Apart from realizing self-value and creating value, the group of people are the “gatekeepers” of the entrance to the most lively household consumption of China. In addition to providing physical commodities in future, Yunji will have big eco-opportunities to enter tourism, K12 education and other fields.

After this round of financing, Yunji would continue driving domestic and overseas established brands to enter its platform in 2018 and add new categories like tourism, auto, education and so on to improve its whole business eco-chain and provide one-stop services to meet consumers’ demand with its brand-new marketing model, Xiao Shanglve said.